The White House on Wednesday said it had granted the Big Three automakers a temporary reprieve from tariffs after a call with President Trump.
Shares of all three automakers — Ford (F), GM (GM), and Stellantis (STLA) — were higher in midday trading after the news.
Reading a statement from the president at Wednesday’s press briefing, White House press secretary Karoline Leavitt said: “We spoke with the Big Three auto dealers. We’re going to give a one month exemption on any autos coming through USMCA. Reciprocal tariffs will still go into effect on April 2nd, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month so that they are not at an economic disadvantage.”
Leavitt clarified that Stellantis, Ford, and GM were indeed the companies that spoke to Trump, confirming earlier reports, adding, “They requested the call, they made the ask, and the president is happy to do it. It’s a one month exemption.”
At close: March 6 at 4:00:02 PM EST
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Later in the briefing, Leavitt underlined that the delay would only be temporary and that the automakers will again be subject to tariffs in April when Trump’s reciprocal tariffs come into place. She said Trump told the automakers on the call to “start investing, start moving” and that they should “shift production here to the United States of America, where they will pay no tariff.”
The reprieve for automakers came after 25% tariffs were imposed on Tuesday on imports from Mexico and Canada, where many cars are made. Some reports suggested the cost of vehicles could rise anywhere from $4,000 to as much as $12,000 for some cars.
With automakers unable to eat the entire cost of tariffs if imposed without killing margins, the expectation is that much of these costs will be passed on to the consumer. The Alliance for Automotive Innovation (AAI), a trade group representing the auto industry, claims almost the entire tariff will hit the sticker price.
“All automakers will be impacted by these tariffs on Canada and Mexico,” John Bozzella, AAI president, said in a statement released prior to the one-month exemption.
“Most anticipate the price of some vehicle models will increase — by as much as 25 percent — and the negative impact on vehicle price and vehicle availability will be felt almost immediately.”
Read more: What Trump’s tariffs mean for the economy and your wallet
A Southern California dealer with multiple brands — including Ford and Toyota — told Yahoo Finance they aren’t too concerned about tariffs yet unless an extended trade war occurs.
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