Auto makers, you’ve got one month…

NEW KIA VEHICLES AT THE PORT OF TACOMA IN TACOMA, WASHINGTON.

President Trump gave a one-month tariff reprieve to auto makers on Wednesday, a day after his 25% tax on imports from Mexico and Canada took effect. Everyone else will still pay. Welcome to the Trump tariff thrill ride, where you never know what’s going to happen next. 

Stock prices surged Wednesday after official news of the auto reprieve, which had been signaled by Commerce Secretary Howard Lutnick. GM and Ford shares jumped in particular. This is the second time Mr. Trump has blinked on tariffs, and investors may figure he’ll do it again in a month. 

Don’t bet the mortgage. White House press secretary Karoline Leavitt said the one-month exemption is to ensure U.S. auto makers are “not at an economic disadvantage” before the President’s tariffs on auto imports from other countries take effect on April 2.

The exemption may also be less than meets the eye. According to the White House statement, the exemption will apply to cars imported from Mexico and Canada. That means manufacturers could still get whacked with tariffs on parts and materials that cross the border, which could add thousands of dollars to the cost of each vehicle.

Manufacturers that assemble cars in North America would still be at a competitive disadvantage. Mr. Trump said in his speech to Congress Tuesday that his policies would allow “our auto industry to absolutely boom.” Executives, investors and dealers beg to differ. General Motors stock is down 11.9% since Mr. Trump’s election while Ford Motor’s is 13.5% lower. 

In any case, motor vehicles made up less than 10% of all U.S. imports from Canada and Mexico last year. U.S. consumers and businesses still face a 25% tax on more than $800 billion of goods, including electronics ($98.3 billion), plastics ($22.1 billion), beverages and spirits ($14.6 billion), fruit ($11.3 billion), paper products ($8.4 billion) and more. 

The auto exemption also won’t shield Americans from retaliation. Canadian Prime Minister Justin Trudeau isn’t lifting his tariffs on U.S. exports. Mexican President Claudia Sheinbaum has also promised to retaliate, saying Tuesday “there is no reason, justification or excuse that supports this decision that will affect our people and nations.” She’s right. 

Mr. Trump originally justified the tariffs under an emergency law to combat the alleged threat of fentanyl. But he claimed Tuesday the tariffs are needed because “we pay subsidies to Canada and to Mexico of hundreds of billions of dollars” and have “very large deficits with both of them.” 

That sounds like White House protectionist in chief Peter Navarro. He and his boss love tariffs for their own sake. Meanwhile, the tariff barrage is causing economic uncertainty and slowing investment—a real thrill a minute.

Copyright ©2025 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the March 6, 2025, print edition as ‘The Trump Tariff Roller Coaster’.