Automakers received temporary reprieve Wednesday from US President Donald Trump's tariffs targeting Canada and Mexico, as concerns mounted over consumer impacts and talks with Canadian Prime Minister Justin Trudeau yielded no immediate breakthrough.
Following discussions with the "Big Three" US automakers -- Stellantis, Ford and General Motors -- Trump decided to "give a one-month exemption on any autos coming through USMCA," White House Press Secretary Karoline Leavitt said, referring to the North American free trade pact.
"They made the ask, and the president is happy to do it," Leavitt told reporters.
Wall Street stocks rallied after the announcement, with shares of the three automakers each surging about 6% or more.
The American Automotive Policy Council said it applauded Trump's move.
But prospects of wider relief were dampened after Trump's call with Trudeau. The US leader said he was unconvinced that Ottawa had done enough to address Washington's concerns over smuggling of the dangerous drug fentanyl.
Canada contributes less than 1% of fentanyl to the United States' illicit supply, according to Canadian and US government data. But Trump has shrugged off these figures.
On social media, Trump accused Trudeau of using the dispute to "stay in power," but noted their discussion ended in a "somewhat" friendly manner.
Later on Wednesday, US Secretary of State Marco Rubio spoke with his Canadian counterpart Melanie Joly, according to a US statement.
"Secretary Rubio reaffirmed the importance of US-Canadian relations and reiterated that the Trump Administration will continue to put Americans' safety and national security first," said US State Department spokesperson Tammy Bruce.
Trump's sharp 25% tariffs on US imports from Canada and Mexico -- with a lower rate for Canadian energy -- kicked in Tuesday, sending global markets tumbling and straining ties between the neighbours.
Ottawa swiftly announced retaliatory levies, while Mexican President Claudia Sheinbaum plans to unveil her response at a mass rally on Sunday.
Trump has cited illegal immigration and fentanyl trafficking in imposing tariffs, though he frequently lambasts alleged trade imbalances when discussing levies.
More exemptions?
Consumer items appear poised for US price hikes after Trump's tariffs on Canada, Mexico and China.
These include products like avocados, strawberries, electronics and gasoline.
Of the agricultural products imported from Mexico to the United States in 2023, more than 72% were fresh fruit and vegetables, as well as beer and other alcohol, government figures showed.
Trump said Tuesday that tariffs would bring "a little disturbance" to the world's biggest economy.
