A concession … while waiting for other gestures? If Donald Trump judged on Wednesday, March 5, that Canada’s responses were insufficient to allow a compromise on customs duties, the American president, however, conceded a one -month exemption for the crucial automotive sector, at the request of the American manufacturers.
This first temporary exemption from customs duties of 25 % imposed in Canada and Mexico was decided so that the major American car manufacturers “do not suffer any economic disadvantages,” the spokesperson for the White House Karoline Leavitt said. This exemption concerns vehicles imported as part of the United States-Mexico (ACEUM) free trade agreement, the spokesperson said. The production channels of American manufacturers are partly installed in Mexico and Canada, parts and vehicles making many back and forth during their manufacture.
Donald Trump “open to the possibility of other exemptions”
Previously, the American Minister of Commerce Howard Lutnick had opened the door to a relaxation in the trade war launched by Donald Trump against his neighbors, assuring that “certain sectors of activity” could be spared by these new taxes.
The manufacturers have in the process “applauded President Trump” for this exemption, in a press release from the Automobile Mobility Policy Council, which represents them. In addition, “the president is open to the possibility of other exemptions”, assured Karoline Leavitt. “We know that prices are increasing for Americans,” she said, citing eggs, which remain a subject of concern.
Customs duties of 25 % on Canadian and Mexican products, except on Canadian hydrocarbons (10 %), entered into force on Tuesday, March 4, plunging the global scholarships. This surcharge concerns both lawyers and tomatoes from Mexico and construction wood or Canada poultry. Ottawa quickly announced tariff reprisals on certain American products and assured that the list would lie over time.
Satisfied financial markets
The exemption concerning imported vehicles was well received by the financial markets. The New York Stock Exchange ended up on Wednesday, resuming its breath after several sessions in the red. Thanks to this exemption from customs duties, the Dow Jones won 1.14 %, the NASDAQ 1.46 %index and the enlarged S&P 500 1.12 %index.
“The market was argued in the short term and was looking for an excuse to bounce back,” decrypts with AFP Patrick O’Hare, from Briefing.com. In this sense, the announcement by Donald Trump of a temporary exemption of customs duties in the automotive sector “acted as a catalyst,” according to the analyst. For Jack Abblin, Cresset Capital, “this confirms what suspected investors, namely that Donald Trump and his administration monitor the markets and that they do not want a lower market to be their fact”. As a result, Ford climbed 5.81 %, General Motors of 7.21 %and Stellantis by 9.24 %.