Trump's Tariff Reprieve: What It Means for US Automakers and Trade

Published:

Trump's Tariff Reprieve: What It Means for US Automakers and Trade
Photo: Paul Sancya/AP/TT

The White House is giving the American automotive industry a month's reprieve from the 25-percent tariffs on goods from Canada and Mexico. The automotive sector is the obvious own goal for the USA, says economist Elisabet Kopelman.

President Donald Trump states in a written statement that negotiations have been held with General Motors, Ford, and Stellantis, all of which have significant trade with Mexico and Canada.

"We spoke with the three major vehicle manufacturers. We will give a one-month reprieve for all vehicles coming in via USMCA," he says.

USMCA is the North American free trade agreement negotiated with Canada and Mexico during Trump's previous term.

The Trump administration introduced 25-percent tariffs against neighboring countries earlier in the week, contrary to the agreement. The new date for when the automotive industry's tariffs will be introduced is April 2.

I'm not surprised. The automotive sector is the obvious self-goal for the USA since the tariffs there hit American companies so extremely hard, says Kopelman, a US economist at SEB.

The shares of automotive giants have risen sharply on the New York stock exchange on Wednesday, and helped the stock market rise overall.

Trudeau stands firm

When Canada's Prime Minister Justin Trudeau responded by announcing tariffs on goods from the USA, Trump's immediate response was that such countermeasures from "Canada's governor" would be met with a new increase in US tariffs.

The Trump administration is now negotiating with Canada and Mexico, and according to US Trade Minister Howard Lutnick, President Trump is willing to compromise.

A high-ranking Canadian government source tells Bloomberg that Trudeau does not intend to withdraw his package of countermeasures in exchange for individual American exemptions.

Reasonable, thinks Elisabet Kopelman at SEB.

This is not a concession to Canada, but a concession that the USA is making to itself. Canada must look out for its own interests, and this will be troublesome for them even if the automotive industry is exempted.

Calming signal

According to Kopelman, Trump's willingness to compromise may likely come to life if Canada and Mexico establish the same tariffs against the rest of the world as the USA – so that goods and components from other countries do not enter the American economy via neighboring countries.

Mexico has taken such steps, and the statement was met with a statement from US Finance Minister Scott Bessent, who welcomed this and said he hoped Canada would take a step in that direction as well.

Wednesday's announcement sends a calming signal to the market, she continues.

It signals that the tariffs are not set in stone, but that this, as before, is partly a negotiating tactic.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

Nelly Wins Case Against Shein but Must Cover Some Court Costs

Nelly Wins Case Against Shein but Must Cover Some Court Costs

Offline Card Purchases Coming by Summer 2026 in Sweden

Offline Card Purchases Coming by Summer 2026 in Sweden

Storm Amy Drives Electricity Prices to Zero in Southern Sweden

Storm Amy Drives Electricity Prices to Zero in Southern Sweden

Blue and yellow IKEA continues to grow in the US - buys a large property in central New York as part of its expansion

Blue and yellow IKEA continues to grow in the US - buys a large property in central New York as part of its expansion

Clas Ohlson Warehouse Staff Face Termination Over New Agreement

Clas Ohlson Warehouse Staff Face Termination Over New Agreement

Stockholm Leads Europe in Stock Market Growth with Verisure Listing

Stockholm Leads Europe in Stock Market Growth with Verisure Listing

Oskarshamn Nuclear Reactor Restart Delayed Again

Oskarshamn Nuclear Reactor Restart Delayed Again

Financial Supervisory Authority Warns of Growing Scam List

Financial Supervisory Authority Warns of Growing Scam List

Service Sector Shows Clear Recovery in September Index

Service Sector Shows Clear Recovery in September Index

Second-Highest Rent Increase in Over 20 Years Reported This Year

Second-Highest Rent Increase in Over 20 Years Reported This Year

Stockholm Stock Market Climbs for Sixth Consecutive Day

Stockholm Stock Market Climbs for Sixth Consecutive Day

International Flights Rise in Sweden This Year

International Flights Rise in Sweden This Year

Japanese Stock Market Rises as Technology Shares Surge

Japanese Stock Market Rises as Technology Shares Surge

Swedish Apartment Prices Drop Since 2021: Where They Fell Most

Swedish Apartment Prices Drop Since 2021: Where They Fell Most

Lyten Signs Collective Agreement After Northvolt Acquisition

Lyten Signs Collective Agreement After Northvolt Acquisition

Democrat Urges Trump to Release Job Figures Amid Government Shutdown

Democrat Urges Trump to Release Job Figures Amid Government Shutdown

Wall Street Hits New Record Levels Amid Tech Stock Gains

Wall Street Hits New Record Levels Amid Tech Stock Gains

Stegra to Purchase Iron Ore from Blacklisted Vale

Stegra to Purchase Iron Ore from Blacklisted Vale

Tesla Exceeds Q3 Delivery Expectations with 497,100 Cars

Tesla Exceeds Q3 Delivery Expectations with 497,100 Cars

US Urges Astra Zeneca to Move Headquarters to New York

US Urges Astra Zeneca to Move Headquarters to New York