Since taking office in late January, President Donald Trump has flummoxed corporate America with repeated threats of tariffs levied on goods coming from Canada, China, and Mexico. On Tuesday, he followed through on his threats by actually enacting a broad 25 percent tax on products imported from Canada and Mexico, after pushing them off for one month. But he quickly changed his tune on vehicles and automotive parts yesterday after speaking with Ford CEO Jim Farley and his colleagues at General Motors and Stellantis. As a result, the auto industry gets another 30 day reprieve until the possibility of tariffs comes up again.
On Wednesday afternoon, the White House exempted automakers from the steep 25 percent tariffs on goods imported from Canada and Mexico for 30 days, as long as they comply with the United States-Mexico-Canada Agreement (USMCA), which Trump signed into law during his first term as president. According to the Associated Press, the Trump administration could potentially enact a new round of comprehensive tariffs in April, as Trump has previously stated his intention to enact tariffs on all other countries that levy tariffs against the United States. Jim Farley has previously stated his support for such a plan, arguing that a limited tax on autos and auto parts from Canada, China, and Mexico hurts Detroit while benefitting Asian automakers.
That said, the inconsistency has irked Bill Ford and Farley, both of whom previously expressed frustration at being unable to properly plan and compensate for the tariffs on an unrealistic timetable. It is currently unclear if Bill Ford is on regular speaking terms with Trump, but the two did speak before the inauguration. Farley also visited Capitol Hill last month to talk with lawmakers.
“As America’s top auto producer, we appreciate President Trump’s work to support our industry and exempt auto companies complying with USMCA. Since President Trump’s successful USMCA was signed, Ford has invested billions in the United States and committed to billions more in the future to both invest in American workers and ensure all of our vehicles comply with USMCA. We will continue to have a healthy and candid dialogue with the Administration to help achieve a bright future for our industry and U.S. manufacturing,” Ford said in a statement.
In terms of vehicles, this latest policy shift enables the automakers to import the Ford Bronco Sport, Ford Maverick, and Ford Mustang Mach-E into the United States from Mexico without an added fee. Since the 30 day exemption also applies to auto parts, big ticket items like the Ford 5.0L V8, 6.7L V8, and 7.3L V8 are also excluded. If the tariffs become a reality next month or further down the road, the Alliance for Automotive Innovation expects all companies impacted to largely pass on the additional costs to consumers.
Comments
This whole tariff thing has become a circus.
Elect a clown expect a circus
You voted for him
Who’s the dumb one now
Expect this to continue for the remainder of Trump’s term(s) Number three??