President Trump recently announced a 25% tariff on auto imports from Canada and Mexico, claiming at one point that automaker executives were “excited” about it. However, Ford, GM, and Stellantis expressed concern that the tariffs could harm American businesses, prompting a one-month exemption after subsequent discussions with Trump. While officials downplayed the impact of a declining stock market, concerns grew over the tariffs’ effects on jobs in border states like Michigan. Trudeau criticized the tariffs during a press conference, and Trump’s administration faces pressure from both industry leaders and GOP lawmakers to reconsider the tariff strategy.
Washington
CNN
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During his address in the House Chamber this week, President Donald Trump expressed that leaders from the nation’s leading automakers were “so excited” about their future under his new tariff system. However, this sentiment did not fully capture the discussions he had with them earlier that same day.
On the earlier call, representatives from Ford Motors, GM, and Stellantis conveyed to Trump that the newly implemented 25% tariffs on imports from Canada and Mexico could unfairly impact their American businesses while benefiting foreign competitors — they directly sought relief from the president, as administration officials revealed.
This feedback appeared to resonate. The following day, after further communications with the automakers, the White House announced a one-month suspension of the tariffs for vehicles entering the United States.
“The president is pleased to do it,” White House press secretary Karoline Leavitt stated on Wednesday while announcing the adjustment.
Despite frequently discussing tariffs, Trump often finds himself swayed against implementing them, particularly when faced with pressure from industry leaders or market fluctuations, which he meticulously monitors.
As he aims to reshape international trade through his preferred strategy, the president has made it clear that the potential for imposing tariffs serves as much motivation as their actual application.
“The president is receptive to discussions regarding additional exemptions,” Leavitt mentioned. “He maintains open communication and will always strive to do what is right, what he believes is right for the American populace.”
While Trump was inclined to grant the automakers a grace period regarding the new tariffs, he offered no such leniency to Canadian Prime Minister Justin Trudeau. Instead, during a Wednesday phone conversation, he expressed that Trudeau had failed to adequately address the issue of fentanyl trafficking across the border—despite the minimal amounts that enter the U.S. from Canada. Following the call, which Trump described as having ended “somewhat” amicably, he suggested that Trudeau might be leveraging the tariff situation to hold onto his position of power.
As his long-awaited tariff threats against Canada and Mexico materialized this week, senior White House advisors began receiving a surge of calls from business executives, particularly in the automotive industry, as well as from GOP legislators raising alarms.
Officials from the White House and federal administration provided little specific direction regarding those discussions surrounding the tariffs, but they indicated that they understood the worries being expressed, according to people familiar with the matters.
On Tuesday, Trump, who primarily remained out of sight while preparing for his evening address, consulted with leading auto executives to hear their apprehensions. Earlier that day, a significant auto industry lobby group cautioned that vehicle prices could surge by as much as 25%, with immediate repercussions.
Concurrently, Trump, who has long been fixated on the performance of his policies in the financial markets, and his team were closely monitoring the stock market on Tuesday, noting a decline following the introduction of the tariffs, a source acquainted with the discussions informed CNN. Many close to Trump believe the markets will ultimately stabilize, although the drop was a significant shock within the West Wing.
On Wednesday, Leavitt downplayed the influence of the noticeable drop in the stock market on the president’s decision to grant a one-month reprieve for automotive companies.
“For those on Wall Street who may be uneasy, consider what this president accomplished during his first term,” Leavitt remarked to reporters. “Wall Street thrived. The stock market flourished. The president anticipates a repeat of that success.”
Some officials also began expressing concerns internally this week regarding the tariffs’ potential impact on areas near the northern border, such as Michigan, a key state Trump flipped red in November and which boasts the highest concentration of auto industry jobs in the U.S.
“As the pain starts to affect American communities, especially those closer to Canada, there are worries that the rationale concerning fentanyl won’t be persuasive enough,” a source familiar with the discussions revealed to CNN, referencing the justification Trump provided for the newly imposed tariffs.
Ten minutes after the markets closed on Tuesday — the Dow Jones Industrial Average finishing down 670 points, or 1.55% — Trump’s Commerce Secretary Howard Lutnick took to Fox Business to hint at a possible reprieve.
Indeed, Lutnick was at the forefront of the tariff relief discussions, appearing on television multiple times in the next 24 hours to indicate that Trump was considering steps to ease the situation, at least temporarily.
Yet, during his address from the House Chamber on Tuesday evening, Trump exhibited no signs of retreat. “If your product isn’t made in America during the Trump administration, you will incur a tariff, and in some cases, a substantial one,” he asserted.
However, the next day’s reprieve — which the markets began responding positively to — exemplified yet another instance of the economic turmoil surrounding the Trump administration’s tariff policies. It remained uncertain whether the 36 hours of confusion was indicative of mixed signals or if the White House was hastily trying to please various groups.
“The market has faced two days of uncertainty, and everyone is panicked,” Peter Navarro, senior counselor to the president on trade and manufacturing, mentioned to CNN on Wednesday.
While the automotive sector welcomed the temporary relief, those reliant on a stable market pointed out that the uncertainty would still present a significant challenge.
“This is indeed a relief, but in the long run, the situation remains unchanged,” stated David Kelleher, owner of a Dodge, Chrysler, Jeep, and RAM dealership in Glen Mills, Pennsylvania.
“In the long term, I believe it would be ideal for the administration to collaborate with these companies to enhance our position in America,” he expressed on CNN. “We manufacture most of our vehicles in the United States. We are already producing a majority domestically. For a car dealer, this percentage could significantly harm my profit margins.”
Meanwhile, in Ottawa, officials were striving to make sense of the various statements emerging from Washington.
For an entire week, Trudeau had attempted to contact Trump via telephone without success, mirroring his earlier attempts to speak with the president during his initial term.
By the time he emerged to vehemently criticize Trump’s plan during a Tuesday press conference, Trudeau seemed at a loss as to what Canada could do to appease Trump.
“We do not want this,” he declared. “We wish to cooperate with you as allies and friends, and we do not want to see you harmed either. However, your government has chosen to enact this.”
Observing Trudeau’s press conference from the White House, officials noted when the Canadian leader addressed Trump as “Donald” rather than as “president,” perceiving it as a slight (regardless of the fact that Trump has been referring to Trudeau as “governor” in light of his farfetched territorial ambitions).
There is little warmth in Trump’s White House towards the outgoing prime minister, who has spent his final week in office grappling with the economic consequences of the tariffs.
Trump’s advisors contend that Trudeau’s likely successor from the Liberal Party, Mark Carney, could serve as a more “reasonable” negotiating partner, according to U.S. Treasury Secretary Scott Bessent this week.
Nevertheless, no Canadian politician is likely to endorse Trump’s tariff strategies. Even Pierre Poilievre, leader of the Conservative Party, remarked on Tuesday that Trump “betrayed America’s closest ally” with the new tariffs.
Other Canadian leaders have also drawn the attention of White House officials. Ontario Premier Doug Ford vowed to cease electricity exports to the U.S. “with a smile on my face” if Trump’s tariffs were enforced.
Yet, as some of his typical allies on Wall Street and Capitol Hill have urged Trump to abandon the concept of tariffs as a vital negotiation tool, he and his advisors assert that the strategy has been effective and affirm that they are moving forward to implement reciprocal tariffs on April 2.
“We have seen substantial movement from the Mexican government, but we need to see more cooperation from Canada. We are discussing additional border security measures,” Trump’s national security advisor Mike Waltz stated to CNN on Wednesday.
“They are addressing fentanyl trafficking, but also issues such as Arctic security, northern bases, and other factors which we need to consider as part of this tariff negotiation.”