By Janet H. Cho and Al Root

The White House confirmed that President Donald Trump is giving auto makers a one-month exemption from his 25% tariffs on imports from Mexico and Canada. That is helping boost shares of the Big Three auto makers.

General Motors, Ford Motor, and Stellantis were given the reprieve "so they are not at an economic disadvantage," press secretary Karoline Leavitt told reporters on Wednesday. Shares of those companies were up about 7% on average, while the S&P 500 and Dow Jones Industrial Average were up about 1.1%.

Stellantis is the Netherlands-based auto maker whose brands include Chrysler, Dodge, Jeep, and Ram Trucks.

The delay comes after the Trump spoke with representatives from the Big Three auto makers. "We are going to give a one-month exemption on any autos coming through USMCA," Leavitt said. USMCA is the acronym for the U.S. Mexico Canada Agreement, a trade deal Trump negotiated during his first term.

Trump told Congress in his speech Tuesday night that he had talked to the Big Three auto makers that day, saying that "We're going to have growth in the auto industry like nobody's ever seen," with plants opening up, deals being made, and tariffs that he said would see the auto industry "absolutely boom."

Auto makers have been seeking an exemption from the tariffs since Trump announced them last month, warning that they would increase the cost of manufacturing, auto parts, and car prices.

Tariff fears have weighed on the sector. Coming into Wednesday trading, Ford, GM, and Stellantis shares were down about 15% on average since the Nov. 5 presidential election.

Tariffs on Canada and Mexico have the potential to raise costs and wipe out billions in profits across the industry, Ford CEO Jim Farley said on his company's fourth-quarter earnings call in February. Millions of cars sold in the U.S. are assembled in Canada and Mexico, and more than half of the parts on some popular models originate in those countries, according to government data.

Trump's reciprocal tariffs on imports from countries that impose levies on American products will still go into effect on April 2, the White House said.

Earlier Wednesday, Commerce Secretary Howard Lutnick said on Bloomberg Television that "there will be some categories left out, it could well be autos, it could be others as well" from the Mexico-Canada tariffs.

The delay is a temporary reprieve, but investors are hopeful that the exemptions will last. "North American [integration] makes too much sense, " says Arjun Divecha, director and head of emerging-markets equity at GMO. He has been studying supply-chain movements for decades. Stock prices reflected expectations of tariffs for months, not years, Divecha says.

The U.S.-listed shares of Toyota Motor were up about 6%. The company exports cars to the U.S. from Mexico, Canada, and Japan, but American investors' tariff fears haven't hurt its shares. Its stock wasn't hit by domestic tariff disputes and had risen about 3% since the Nov. 5 election, coming into Wednesday trading.

What's more, shares of Volkswagen and BMW, two more companies that export cars to the U.S., were up about 4% and 5%, respectively, in overseas trading. Coming into the day, both stocks were up more than 10% since the Nov. 5 election. Those moves could be a signal that foreign investors believe the worst of the tariff threat has passed.

Write to Janet H. Cho at janet.cho@dowjones.com and Al Root at allen.root@dowjones.com

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March 05, 2025 14:59 ET (19:59 GMT)

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