In a move that’s sure to grab the auto industry’s attention, President Trump has just hit pause on his 25% tariffs on Canadian and Mexican vehicles…for now. Following pressure from major automakers, including Ford and GM CEOs and a high-level Stellantis exec, the White House announced a one-month delay on the tariffs, giving manufacturers a brief – maybe too brief – window to adjust. This applies to all automakers operating under the U.S.-Mexico-Canada Agreement (USMCA).

White House spokesperson Karoline Leavitt confirmed the decision, saying that the administration spoke with the “Big Three,” and making it clear that Trump “isn’t backing down” from his broader trade war. While automakers welcome the delay, the administration remains focused on using tariffs as leverage, particularly to pressure Canada and Mexico on fentanyl trafficking.

A 50-minute phone call between Trump and Canadian Prime Minister Justin Trudeau also factored into the decision. According to Trump, Trudeau asked about easing the tariffs, but the president doubled down on fentanyl concerns, saying Canada’s efforts weren’t enough. While Trump described the call as ending in a “somewhat friendly manner,” he later took a jab at Trudeau on Truth Social, accusing him of using the trade dispute to hold onto power.

The auto industry, meanwhile, is scrambling to make operational sense of the tariffs.

The American Automotive Policy Council, which represents Ford, GM, and Stellantis, is pushing for a full exemption on vehicles and parts that meet USMCA’s strict content requirements. Industry leaders warn that even a short delay won’t be enough to prevent disruptions to an already complex supply chain.

Canada has ramped up enforcement at the border, deploying more surveillance and even designating fentanyl-linked criminal organizations as terrorist groups. But Trump indicates he remains skeptical. With just a month before the tariffs kick in, automakers, suppliers, and trade officials are bracing for what could be a major shake-up in North American auto manufacturing.

“Obviously a pause is welcome, but this constant ‘on again-off again’ of tariffs is difficult for companies that are trying to make sourcing and pricing decisions in real time,” responded Tiffany Smith of the National Foreign Trade Council. “We continue to hope that Mexico, Canada, and the US can resolve the situation without needing to resort to tariffs or threats,” Politico cited her saying.

The U.S. imports tens of billions of dollars in cars and automotive parts from both countries. As such, we can imagine the effect 25% tariffs on these products would have on U.S.-based automakers operating in either Canada or Mexico. As costs to build and deliver products suddenly increase, automakers would be forced to make quick, possibly devastating decisions regarding what products they’ll offer consumers and where to build them profitably.