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The White House announced on Wednesday that it will postpone the implementation of a 25% tariff on automobiles entering the U.S. from Mexico and Canada until April 2.
The measure comes after President Donald Trump held a meeting on Tuesday with the three largest American manufacturers—General Motors (GM), Ford, and Stellantis—that assemble vehicles in the two neighboring countries, and after Mexico and Canada announced that they would respond to the U.S. tariffs.
According to Bloomberg's report on March 4, the Trump administration is attempting to mitigate the negative effects on production and employment in the automotive industry with this postponement.
This measure was positively received by the markets, where the stocks of the three companies rose following the announcement of the potential moratorium.
The North American automotive sector, which includes the United States, Canada , and Mexico, has been one of the most affected by the trade war in the region, as the parts used in vehicle manufacturing cross borders up to eight times during the production process.
According to S&P Global Mobility, tariffs could reduce vehicle production in the region by 33%, leading to a significant decrease in daily car production—around 63,900 units—and potentially resulting in layoffs at manufacturing plants and component supplier companies.
Donald Trump claims that the increase in tariffs is a response to countries not doing anything to stop the flow of fentanyl into the United States.
On his social network Truth, he said that "Justin Trudeau, from Canada, called me to ask what could be done about tariffs. I told him that many people have died because of fentanyl that came through the borders of Canada and Mexico, and nothing has convinced me that it has stopped." He then accused him of using the tariff issue to stay in power.
The announcement of the tariffs by Trump has generated an immediate international response.
Canada has already implemented its own tariffs in retaliation, while Mexico, which had remained cautious, announced on Tuesday that its government will impose tariff and non-tariff measures in response to the United States' decision to apply a 25% levy on Mexican imports.
The president of Mexico, Claudia Sheinbaum, described the tariffs as "unthinkable" and warned about the negative consequences that could affect both nations. Her government has promised to announce its formal response next Sunday, March 9.
In South Florida, experts such as Albert Williams, professor of finance and economics at Nova Southeastern University, warn that tariffs could lead to an increase in the prices of everyday products, from avocados to trucks manufactured in Mexico.
According to Williams, imported trucks could face an increase of between $3,000 and $12,000 per unit due to the new tariffs.
Frequently Asked Questions about Trump's Decision to Delay Tariffs on Mexico and Canada
Why did Trump decide to postpone the tariffs on cars from Mexico and Canada?
Trump decided to postpone the tariffs after meeting with the largest automobile manufacturers in the United States to mitigate the negative effects on production and employment in the automotive industry. The measure aims to prevent a significant decline in vehicle production in the region and potential layoffs at manufacturing plants.
What are the economic repercussions of these tariffs on the automotive industry?
Tariffs could reduce vehicle production in North America by 33%, leading to a decrease of around 63,900 units daily and potentially resulting in layoffs at manufacturing plants and supplier companies. This would significantly impact the economies of the United States, Mexico, and Canada, affecting both consumers and workers in the automotive industry.
What measures have Mexico and Canada taken in response to Trump's tariffs?
Canada has implemented retaliatory tariffs and announced lawsuits before the World Trade Organization and the agreement between Mexico, the United States, and Canada. Mexico, for its part, has promised to implement tariff and non-tariff measures in response to the decisions made by the United States. Both countries seek to protect their economies from Trump's aggressive trade policies.
What is Trump's stance on tariffs and their impact on prices in the U.S.?
Trump has defended his tariff strategy by claiming that tariffs will strengthen domestic production and dismissing concerns about rising prices in the U.S. He believes that the negative impact on prices is a "myth" propagated by foreign countries that do not want to pay tariffs. However, experts warn that these tariffs could lead to an increase in the prices of everyday products.
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