The 30-day pause is intended to give automakers a brief window to shift their production back over to the US. By Stewart Burnett
The same day the US’ 25% tariffs on Canadian and Mexican imports came into effect, President granted a 30-day exemption to automakers that are compliant with USMCA rules on sourcing. White House Press Secretary Karoline Leavitt clarified that the pause is to give automakers time to “start investing, start moving, [and] shift production here to the United States of America. That’s the ultimate goal.” Reciprocal tariffs will go into effect on April 2.
Under the rules of the USMCA trade pact, agreed to during the first Trump administration, automakers must demonstrate that their car parts are at least 75% US-made. This rule was phased in and came into full effect in June 2023. While full information about which automakers are compliant is not currently available, Detroit automakers GM, Ford and Stellantis, have all confirmed that they are. Notably, Stellantis hit pause on a US$1.2bn retool of its assembly plant in Brampton, Ontario, on 21 February. At the time, a spokesperson told Automotive World that the pause was to reassess customer demand for vehicles.
For automakers that are USMCA-compliant, the 30-day pause will grant automakers some much-needed, albeit temporary, relief. It could also prevent President Trump’s own supporters from feeling the brunt of his trade war. DC law firm has warned that the 25% tariffs could lead to a corresponding increase in sticker prices of up to 25% for some vehicles. Full-size pickup trucks, which are sold disproportionately to Republican voters, come in at an average sticker price of US$65,000 according to January data from Cox Automotive. Across all brands, around 3 million pickups were sold in the US in 2024, comprising around 20% of all vehicle sales. Roughly a third of all US pickups are manufactured in Mexico and Canada.
In a statement to Detroit Free Press, Ford spokesperson Robyn Jackson said: “We appreciate President Trump’s work to support our industry and exempt auto companies complying with (the U.S-Mexico-Canada Trade Agreement). Since President Trump’s successful USMCA was signed, Ford has invested billions in the United States and committed to billions more in the future to both invest in American workers and ensure all of our vehicles comply with USMCA. We will continue to have a healthy and candid dialogue with the administration to help achieve a bright future for our industry and U.S. manufacturing.”#
Stellantis told the outlet: “We thank President Trump for the decision to grant a one-month exemption from tariffs to USMCA-compliant products. We strongly support his determination to enable the American automotive sector to thrive, and in the first 100 hours of his new administration we announced major investments to grow our business in America. Since the USMCA was enacted in his first term, we invested billions in our U.S. activities and U.S. suppliers. We share the President’s objective to build more American cars and create lasting American jobs.”
GM said: “We thank President Trump for his approach, which enables American automakers like GM to compete and invest domestically. With more vehicle assembly plants in the U.S. than any other automaker, GM has invested over $60 billion since the USMCA took effect, and we continue to invest billions of dollars every year in our manufacturing base, supply chain, and U.S. jobs. We are committed to continued growth and delivering winning vehicles to American consumers.”
