Trump Exempts Some Automakers From Canada, Mexico Tariffs For One Month

US President Donald Trump will exempt automakers from his punishing 25 percent tariffs on Canada and Mexico for one month, as long as they comply with an existing free trade agreement, the White House said on March 5.

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The development brought a halt, at least for now, to Wall Street's steepest skid in nearly three months.

Mr. Trump is also open to hearing about other products that should be exempted from the tariffs, which took effect on March 4, the White House said.

He also made clear that he was not calling off his trade war with Canada and Mexico as he pressures the two countries to deter fentanyl smuggling into the U.S.

After a phone call with Canada's Prime Minister Justin Trudeau, Mr. Trump said he was not convinced the situation had improved.

"He said that it's gotten better, but I said, 'That's not good enough,'" Mr. Trump wrote on his Truth Social platform. "The call ended in a 'somewhat' friendly manner!"

Public data shows that only 0.2 percent of all fentanyl seized in the U.S. comes from across the Canadian border, while the vast majority originates from across the southern border.

Canada is willing to reduce its retaliation against U.S. tariffs if the Trump administration drops some of the tariffs it has imposed, a Canadian government source said.

Negotiations between Ottawa and Washington were continuing, and no deal had yet been reached, cautioned the source, who spoke on the condition of anonymity.

The one-month reprieve sparked a rebound in auto stocks, but trade tensions have created unexpected uncertainty for U.S. corporations and sapped consumer confidence, leading to a sell-off in stocks in recent days.

General Motors shares were up 7.2 percent and Ford gained 5.8 percent on March 5, but both companies' shares are still down on the year.

Mr. Trump's tariffs pose extreme difficulties for automakers, which produce vehicles in all three countries and often ship parts across North American borders multiple times as they get built up into systems and finished vehicles.