Michigan automakers get break on Trump tariffs — for now

• Trump administration announces one-month delay on auto industry tariffs for Canadian, Mexican imports
• The tariff carve out came at the request of auto company leaders to President Donald Trump
• US officials spoke to Canada’s prime minister Wednesday about the trade war that started Tuesday

Michigan auto companies are getting a one-month reprieve from tariffs imposed by President Donald Trump that economists said were likely to cause chaos in the state’s biggest industry.

The automakers had urged Trump to waive 25% tariffs that had gone into effect Tuesday on products manufactured in Mexico and Canada that comply with rules of origin under the US-Mexico-Canada Agreement, a trade deal Trump initially signed in 2020. 

The president agreed, White House spokesperson Karoline Leavitt said Wednesday afternoon, telling reporters the administration is still planning broad reciprocal tariffs on April 2. 

“At the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage.” Leavitt said. “The three companies that he spoke to are Stellantis, Ford and General Motors. They requested the call (with the president). They made the ask. And the president is happy to do it.”

GM CEO Mary Barra, Ford CEO Jim Farley along with Ford executive chairman Bill Ford and Stellantis chair John Elkann took part in a call with Trump Tuesday, according to Reuters.

Related:

• Trump tariffs spark ‘trade war’ with Michigan’s biggest trade partners
• Michigan braces for Trump tariffs on Canada, a $77B trade partner
• Fact check: Trump promised a ‘Michigan miracle.’ Now comes the hard part

Meanwhile, US officials appear to be continuing negotiations with Canada, which on Tuesday imposed retaliatory tariffs in response to Trump’s import taxes on most goods from Michigan’s biggest international trade partner. 

Trump, Vice President JD Vance and Commerce Secretary Howard Lutnick reportedly held a 50-minute call about tariffs with Canadian Prime Minister Justin Trudeau on Wednesday.

The trade war has high stakes in Michigan. where auto industry supply chains blur borders. Roughly $77 billion in goods cross the Canadian border each year, and the state trades another $69 billion with Mexico. 

Some auto parts cross between Canada and the US several times before an auto leaves an assembly line.

More than 280,000 Michiganders work in auto industry jobs, and the state has more than 2,200 automotive supplier and technology center facilities, according to data from MichAuto at the Detroit Regional Chamber.

The one-month tariff delay is “somewhat of a reprieve for the industry,” MichAuto Executive Director Glenn Stevens Jr. said in a statement. 

But “damage has already been done,” he added. “For an industry that operates in three-to-five-year product cycles, this level of day-to-day uncertainty is debilitating.” 

Gov. Gretchen Whitmer said Wednesday she was “grateful”  for the one-month delay. 

“We all want to lower costs, bring manufacturing back home, and make more cars in America,” Whitmer wrote on social media site X. “These tariffs would jack up prices (and) lead to layoffs. We just can't afford it.”

Michigan Congressman John James, R-10, praised the tariff delay on X, saying Trump “is standing up for Michigan workers and Michigan’s economy.” James said the one-month exemption shows Trump “understands the complexity of the auto industry.”

The American Automotive Policy Council — which represents GM, Ford and Stellantis — had argued the tariffs would "raise the cost of building vehicles in the United States and stymie investment in the American workforce."

Experts warned the tariffs could also increase car prices for consumers.

Trump’s tariffs on Canada and Mexico, combined with steel and aluminum tariffs already implemented by the Trump administration, could increase costs for North American-produced vehicles by between $4,000 to $10,000, according to a study by the Anderson Economic Group of East Lansing, which had accounted for automakers’ expected attempts to substitute parts and adjust production. 

 In his address to Congress Tuesday, Trump urged manufacturers to move more auto operations to the United States.

"Tariffs are about making America rich again and making America great again,” he said. “And it's happening, and it will happen rather quickly. There'll be a little disturbance, but we're okay with that. It won't be much.”