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Facing market pressure and GOP pushback, Trump delays auto tariffs

When President Donald Trump declared in the House Chamber this week that executives at the nation’s top automakers were “so excited” about their prospects amid his new tariff regime, it did not entirely reflect the conversation he’d held with them earlier that day.

Ford Motors, GM and Stellantis argued on that call that the new 25% tariffs the president applied on Canada and Mexico earlier this week could disadvantage their American-based businesses in favor of foreign carmakers — appealing directly to Trump for a reprieve, administration officials said.

The message seemed to break through. A day later, after the automakers talked to Trump again, the White House announced a one-month exemption from the tariffs for autos coming into the United States.

“The president is happy to do it,” White House press secretary Karoline Leavitt said Wednesday, announcing the change.

For as often as Trump talks about tariffs, he is often talked out of imposing them – especially if the pressure is coming from titans of industry or the market, a barometer that Trump carefully follows.

And as he works to realign global trade using his favorite tool, the president has made clear the threat of tariffs is as much a motivator as the actual thing.

“The president is open to hearing about additional exemptions,” Leavitt said. “He always has open dialogue and he’ll always do what’s right, what he believes is right for the American people.”

While Trump was willing to give the automakers a month before applying the new tariffs, he offered no such concessions to Canada’s Prime Minister Justin Trudeau. Instead, he said he told Trudeau on a Wednesday telephone call that he hadn’t done enough to curb fentanyl crossing the border — despite the minuscule amount that arrives in the US from its northern neighbor. Trump suggested after the call — which he said “ended in a ‘somewhat’ friendly manner” — that the outgoing Trudeau could be using the tariff issue to “stay in power.”

As his long-promised tariff threat on Canada and Mexico turned into reality this week, top White House advisers began fielding a wave of calls from business leaders, particularly in the automotive sector, along with GOP lawmakers who were sounding the alarm.

White House and administration officials offered little specific guidance on those calls for how they would proceed with the tariffs but did convey they understood the concerns, people familiar with the conversations said.

Trump, who spent Tuesday mostly behind closed doors preparing for his prime-time speech, spoke to the top auto executives to hear out their concerns. Earlier in the day, a top auto lobby group warned vehicle prices could jump as much as 25%, with the impacts being felt “almost immediately.”

At the same time, Trump – who has long fixated on how his policies perform in the markets – and his team were paying close attention to the stock market on Tuesday, watching as it fell on the implementation of the tariffs, a source familiar with the discussions told CNN. Many people close to Trump believe the markets will ultimately stabilize, two sources familiar with the discussions said, though the tumble was a jolt inside the West Wing.

Leavitt on Wednesday downplayed the role that a sweeping decline in the stock market played into the president’s decision to offer a one-month reprieve for auto companies.

“I think for folks on Wall Street who may be concerned, look at what this president did for you in his first term,” Leavitt told reporters. “Wall Street boomed. Stock market boomed. The president expects that to happen again.”

Some officials this week also began to voice concerns internally at how the tariffs would affect areas of the country close to the northern border such as Michigan, a state Trump flipped red in November and has the highest number of auto industry jobs in the US.

“As pain begins to hit American cities, particularly those nearer to Canada, there are concerns that the fentanyl argument isn’t going to be strong enough” for Americans being impacted, a source familiar with the discussions told CNN, referring to Trump’s rationale for slapping the new tariffs on.

Ten minutes after markets closed on Tuesday — the Dow Jones Industrial Average ended down 670 points, or 1.55% — Trump’s Commerce Secretary Howard Lutnick had taken to Fox Business to preview a potential reprieve.

Indeed, it was Lutnick who appeared on the leading edge of the tariff relief, appearing on television at least two more times in the next 24 hours to suggest Trump was considering steps to ease off, at least temporarily.

Yet speaking from the House Chamber on Tuesday evening, Trump did not sound like a man ready to back down. “If you don’t make your product in America under the Trump administration, you will pay a tariff and in some cases a rather large one,” he insisted.

But the next day’s reprieve – to which markets showed early signs of a positive response – was the latest example of economic whiplash by the Trump administration over tariffs. It remained an open question whether the 36 hours of chaos was a case of mixed messaging or a White House simply scrambling to appease various constituencies.

“We’ve had two days of uncertainty in the market and everybody’s hair is on fire,” Peter Navarro, senior counselor to the president on trade and manufacturing, told CNN on Wednesday.

While the auto industry welcomed the monthlong relief, those whose livelihoods depend on a stable market said the uncertainty would still pose a steep challenge.

“It’s certainly a relief, but long term the situation doesn’t change,” said David Kelleher, the owner of a Dodge, Chrysler, Jeep and RAM dealership in Glen Mills, Pennsylvania.

“Long term, I think it would be great for the administration to work with these companies and figure out means to enhance our position in America,” he said on CNN. “We build a majority of our vehicles in the United States. We’re already building a majority in the United States. For a car dealer, this percentage would completely ruin my bottom line.”

In Ottawa, officials worked to reconcile the various messages coming from Washington.

For the past week, Trudeau had been trying to reach Trump by telephone without success, a repeat of his attempts when Trump first came into office to speak with his counterpart.

By the time he emerged to angrily denounce Trump’s plan in a press conference on Tuesday, Trudeau seemed at a loss for what Canada could do to satisfy Trump.

“We don’t want this,” he said. “We want to work with you as a friend and ally, and we don’t want to see you hurt either. But your government has chosen to do this to you.”

Watching Trudeau’s press conference at the White House, officials took note when the Canadian leader referred to Trump as “Donald” instead of “president,” which they took as a show of disrespect (nevermind Trump has taken to calling Trudeau “governor” in a reference to his farfetched territorial ambitions).

There is no warm sentiment in Trump’s White House for the outgoing prime minister, who has spent his final week in office contenting with the economic fallout of the tariffs.

Trump’s advisers believe Trudeau’s likely Liberal Party successor Mark Carney could be a more “reasonable” partner, US Treasury Secretary Scott Bessent said this week.

Still, no Canadian politician is going to embrace Trump’s tariff strategy. Even the leader of the Conservative Party, Pierre Poilievre, said Tuesday that Trump “stabbed America’s best friend in the back” with the new tariffs.

Other leaders in Canada have also caught the attention of White House officials. Ontario’s premier Doug Ford vowed to cut electricity exports to the US “with a smile on my face” if Trump’s tariffs were enacted.

But even as some of his traditional allies on Wall Street and Capitol Hill have urged Trump to abandon the notion of tariffs as a crucial negotiating tool, he and his advisers insist the strategy has been working and say they are proceeding full-steam ahead to enact reciprocal tariffs on April 2.

“We’ve seen incredible movement on the part of the Mexican government, but we need to see more from Canada. We’re talking about additional border security,” Trump’s national security adviser Mike Waltz told CNN on Wednesday.

“Their borders are cutting off fentanyl, but also things like Arctic security, northern bases and other pieces that we need to see as part of this tariff negotiation.”

Canada tries to navigate Trump’s tariffs

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NEWS & BUZZ

Automakers get 1-month tariff exemption, White House says

President Donald Trump granted Stellantis, Ford and General Motors a one-month tariff exemption, the White House said Wednesday.

U.S. automakers who comply with the United States-Mexico-Canada Agreement (USMCA) are getting a one-month exemption from the Trump administration’s tariffs that went into effect Monday, White House press secretary Karoline Leavitt announced Wednesday.

“We spoke with the Big Three automakers,” Leavitt confirmed. “We are going to give a one-month exemption on any autos coming through USMCA.”

“Reciprocal tariffs will still go into effect on April 2, but 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.

She told reporters that Stellantis, Ford and General Motors were the companies Trump spoke with.

“They requested the call. They made the ask and the president is happy to do it,” Leavitt added. “It’s a one-month exemption.”

TRUMP SIGNS RECIPROCAL TARIFF PLAN: ECONOMISTS WEIGH IN ON HOW IT COULD WORK

Ford Mach-E EV vehicles are seen at a dealership in Richmond, California, on Monday. (David Paul Morris/Bloomberg via Getty Images / Getty Images)

The USMCA was signed during Trump’s first term.

In mid-February, Trump signed an executive order imposing reciprocal tariffs on U.S. trading partners, effectively raising duties on imports to match those levied on America’s exports.

TRUMP TELLS TRUDEAU FENTANYL CRACKDOWN ‘NOT GOOD ENOUGH’ TO STAVE OFF TARIFFS

The Trump administration is set to impose reciprocal tariffs on April 2. (Reuters/Nathan Howard / Reuters)

The Trump administration aims to complete its trade review by April 1 and plans to target what it calls the most “egregious” issues first, including countries with large trade surpluses with the U.S. and the highest tariff rates on American goods.

The president’s tariffs would match other countries’ higher tariff rates and aim to counter other trade barriers like burdensome regulations, value-added taxes, government subsidies and exchange rate policies and to negotiate with some countries to reduce those barriers.

Engines are lifted at the Stellantis Dundee Engine Complex in Dundee, Michigan, on Aug. 18, 2022. (Bill Pugliano/Getty Images / Getty Images)

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Critics say the tariffs could raise prices for American consumers. The Trump White House sees tariffs as a tool for leverage in economic and foreign policy negotiations, and for bringing companies back to the U.S.

FOX Business’ Eric Revell, Louis Casiano and Hillary Vaughn and Reuters contributed to this report.

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Stellantis, Ford and General Motors asked for call with Trump after tariffs go into effect

Automakers get 1-month Trump tariff exemption: White House

Market Futures

Ticker	Security	Last	Change	Change %
F	FORD MOTOR CO.	9.65	+0.52	+5.70%
GM	GENERAL MOTORS CO.	48.45	+3.23	+7.15%
STLA	STELLANTIS NV	12.89	+1.09	+9.28%
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