White House press secretary Caroline Levitt said at a briefing on the 5th, "We have talked to the 'Big Three' automakers," adding, "We will exempt tariffs for one month on cars entering the United States through the 'USMCA'." "At the request of the industry associated with the USMCA, the President has put the application of tariffs on hold for a month to ensure they are not subject to economic disadvantage," Levitt added. It was made clear that the exemption was not to consider relations with Canada and Mexico, but to protect their industry.
Before the Trump administration decided to suspend tariffs on automobiles for one month, President Trump spoke with representatives of the big three U.S. automakers, including GM, Ford and Stellantis. Given that the tariff measures have since been postponed, they seem to have raised concerns that their companies' car production could be disrupted. In other words, CEOs of U.S. automakers stopped what Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum failed to prevent.
According to Bloomberg, President Trump spoke to Ford Chairman Bill Ford, Ford CEO Jim Farley, GM CEO Mary Barra, and Stellantis Chairman John Elkann on the day the tariffs began. They are said to have requested an exception in that the Trump administration's tariff measures could cause serious harm to the automobile industry.
In fact, concerns in the U.S. auto industry were quite high over President Trump's tariff policy. According to Reuters, John Bozella, chairman of the Alliance for Automotive Innovation (AAI), which represents major U.S. automakers except electric carmaker Tesla, said, "All automakers will be affected by Canadian and Mexican tariffs." "Most people expect some vehicle prices to rise by as much as 25%, and the negative impact on car prices and deliveries will be felt immediately," Bozela said. According to an analysis of Wolf Research cited by Reuters, the imposition of tariffs could increase the price of all cars by an average of $3,000, while Canadian and Mexican cars could rise to $7,000. In addition, there are virtually no cars made of only American parts. According to Barclays Bank analysts, up to 40% of parts used in U.S. cars are from Mexico, and more than 20% are from Canada.
In response, GM, Ford, and Stellantis welcomed the Trump administration's tariff exemption. "We will continue to have healthy and candid conversations with the (Trump) administration to help achieve a bright future for our industry and for American manufacturing," Ford said in a statement.
As the Trump administration decided to suspend the application of auto tariffs to Canada and Mexico for one month, Korean automakers and parts makers entering Mexico will have time to respond. According to KOTRA, there are about 100 Korean auto parts companies operating in Mexico.
[Washington correspondent Choi Seungjin]
