U.S. automakers now have a reprieve, at least for now, from the impact of the new tariffs on imported goods from Mexico and Canada. President Donald J. Trump has agreed to an exemption for the Big Three automakers if they comply with the United States-Mexico-Canada Agreement (USMCA).

White House press secretary Karoline Leavitt explained on Wednesday that Trump announced the one-month exemption after meeting with leaders from Ford, General Motors, and Stellantis.

United States-Mexico-Canada Agreement 

The USMCA replaced the North American Free Trade Agreement (NAFTA) and went into effect on July 1, 2020, during Trump’s first term.

When Trump’s tariffs were announced earlier this year, some industry and manufacturing leaders cited the success of the USMCA and expressed hopes that the new tariffs would not undo what had been accomplished under the USMCA.

Jay Timmons, president and CEO of the National Association of Manufacturers, pointed to manufacturing gains resulting from the United States-Mexico-Canada Agreement, a trade agreement formed during Trump’s first administration. 

“Thanks to this agreement, one-third of critical U.S. manufacturing inputs now come from Canada or Mexico, rather than from competitors like China that often engage in unfair trade practices,” Jay Timmons, president and CEO of the National Association of Manufacturers, said in a statement.

“The United States-Mexico-Canada Agreement was a major achievement of President Trump’s first administration,” said Chris Spear, CEO and president of the American Trucking Associations.

Automaker Reacts to Exemption, Support for USMCA

Ford leadership also voiced support for USMCA, calling it successful from day one, and released a statement about the more recent exemption from the new tariffs.

“We appreciate President Trump’s work to support our industry and exempt auto companies complying with USMCA,” Ford said in a statement. “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 continued.