Donald Trump is already backing off some of his tariffs only one day after they went into effect.
On Wednesday, the Trump administration granted a one-month exception to U.S. automobile companies from the 25 percent tariffs on goods from Mexico and Canada. The change came after the president spoke with CEOs of the Big Three automakers: Ford, General Motors, and Stellantis. Trump reportedly told the auto executives that they should move their production to the United States, according to White House press secretary Karoline Leavitt.
“We spoke with the Big Three auto dealers,” Trump said in a statement read by Leavitt. “We are going to give a one-month exemption on any autos coming through USMCA,” he added, referring to the free trade agreement between Mexico, the U.S., and Canada. Leavitt told reporters that Trump is open to additional exemptions, although none are planned at this time.
Trump imposed tariffs on Canada, Mexico, and China on Tuesday, prompting the stock market to plummet and Mexican, Canadian, and Chinese leaders to announce retaliatory tariffs. The premier of Ontario, Canada’s most populous province, told the Associated Press that the auto industry in Canada and the U.S. could only last 10 days before assembly lines would start to shut down.
“People are going to lose their jobs,” Doug Ford said.
The exemption follows remarks by Commerce Secretary Howard Lutnick Wednesday morning on Bloomberg Television that Trump would update his tariff plans later in the day.
“There are going to be tariffs, let’s be clear,” Lutnick said. “But what he’s thinking about is which sections of the market that can maybe—maybe—he’ll consider giving them relief until we get to, of course, April 2.”
Trump’s tariffs are expected to raise the prices of numerous goods in the U.S. aside from automobiles, including groceries, electronics, and farm equipment. They also will cause negative ripple effects for the American public, including higher utility bills, partly due to Ford’s threats to cut off electricity to the United States.
It remains to be seen if there will be more carve-outs for Trump’s tariffs, although a rapidly worsening economy could force the president’s hand. What Trump’s endgame is for his very unwise economic plans is not clear, but in the meantime, the American taxpayer will bear the brunt of his folly.
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