US PRESIDENT DONALD Trump is granting a one-month exemption on his new tariffs on imports from Mexico and Canada for US carmakers, amid fears that the trade war could harm American manufacturers.

The announcement comes after Trump spoke with leaders of the “big three” carmakers, Ford, General Motors and Stellantis today.

Trump also said he told the carmaker chief executives that they should move production to the US from Canada and Mexico, according to White House press secretary Karoline Leavitt.

“We spoke with the big three auto dealers,” Trump said in a statement read by his spokesperson.

“We are going to give a one-month exemption on any autos coming through USMCA,” referencing the North American free trade agreement he renegotiated in his first term.

Trump’s press secretary said the president is open to hearing about additional exemptions but Canadian Prime Minister Justin Trudeau is not willing to lift Canada’s retaliatory tariffs if Trump leaves any tariffs on Canada, a senior government official told the Associated Press.

“Both countries will continue to be in contact today,” Trudeau’s office said.

Ontario premier Doug Ford earlier told the Associated Press the auto sector in the US and Canada would last approximately 10 days before they start shutting down the assembly lines in the US and in Ontario.

“People are going to lose their jobs,” he said.

US commerce secretary Howard Lutnick earlier said there might be carveouts coming to the 25% tariffs placed on Canada and Mexico.

But, Trump’s tariffs have stirred up bad blood among allies who see his aggression on trade as misguided, with Canada suggesting it will reject any offer to water down the day-old tariffs.

The trade war is not necessarily a brief skirmish as the White House maintains that even harsher taxes on imports are coming in April, even as businesses and consumers worry that rising costs will crush economic growth, worsen inflation and result in layoffs.

Still, the administration is grappling with the fallout of tariffs that could create serious blowback for his political mandate to lower prices.

Trump has acknowledged that his tariffs could cause some financial pain, yet he has repeatedly said the tariffs will lead to more domestic investment and factory work.

In an interview today with Bloomberg Television, Lutnick said that Trump would update his tariff plans with an afternoon announcement, possibly sparing sectors such as autos from the import taxes.

On 2 April, Trump plans to announce what he calls “reciprocal” tariffs to match the tariffs, taxes and subsidies provided by other countries. That could dramatically increase the tariff rates charged globally while maintaining the risk of a broader tariff.

Lutnick said he would talk today with Trump about the possible options regarding Canada and Mexico, saying that both countries are working to address the US president’s concerns about drug trafficking.

Yesterday, Trump put 25% taxes on imports from Mexico and Canada, taxing Canadian energy products such as oil and electricity at a lower 10% rate.

The president also doubled the 10% tariff he placed on China to 20%.

The administration has said the tariffs are about stopping the smuggling of drugs such as fentanyl, but Trump also suggested that the tariffs are about getting rid of persistent US trade deficits.

The taxes almost immediately triggered retaliatory measures by Canada and China, with Mexico planning to announce its response on Sunday.

The US stock market has given up all of the gains since Trump’s victory in last year’s presidential election and consumers are already exhausted by inflation and worried the costs of the tax hike would lead to higher prices.

The US president tried to play down the possible economic harm as “a little disturbance”, as the administration has suggested that the estimates of higher inflation and slower growth in most outside economic forecasts are overblown.

“It may be a little bit of an adjustment period,” he said after claiming that farmers would benefit from reciprocal tariffs on countries that have tariffs on US exports.

“You have to bear with me again and this will be even better.”