Trump pulls back on auto tariffs; here's where we currently stand

President Donald Trump is granting a one-month exemption on his new tariffs on imports from Mexico and Canada for automakers in the U.S.

The Associated Press reported that President Donald Trump spoke with leaders of the "big 3" automakers, Ford, General Motors, and Stellantis on Wednesday.

Where things stand with auto tariffs

What they're saying:

"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.

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The tariffs may possibly impact some auto parts multiple times as they cross the borders through the interconnected automotive supply chain between the U.S., Canada and Mexico, FOX Business reported, citing the Cato Institute.

The other side:

Ontario Premier Doug Ford told The Associated Press that the auto industry in the U.S. and Canada would last approximately 10 days before they start shutting down the assembly lines because of the tariffs.

"People are going to lose their jobs," he said.

After the White House announced the one month reprieve, shares of big U.S., Asian and European automakers jumped as much as 6%.

The AP noted that pausing the 25% taxes on autos traded through the North American trade pact USMCA would only delay a broader reckoning to happening on April 2, when Trump plans to impose broad "reciprocal" tariffs to match the taxes and subsidies that other countries charge on imports.

Trump addresses tariffs on auto industry

Dig deeper:

As the auto industry braces for higher costs and a disruption to their U.S. supply chains related to the tariffs, President Donald Trump said in his speech to Congress Tuesday night that he spoke yesterday with "all three, the top people" at the major U.S. automakers and "they're so excited." 

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With the new tariffs in place, car prices are projected to rise. Analysts at S&P Global Mobility estimate that the tariffs could increase the price of a new car by $3,000, at a time when car costs are already at record highs.

China, another major player in the auto supply chain, exported $18 billion in auto parts to the U.S. last year. With tariffs on Chinese goods now doubled, further cost increases are expected.

Higher tariffs on steel and aluminum, two key raw materials used for car manufacturing, start in March. Trump has proposed a 25% tariff on imported vehicles from Europe, and other tariffs, NPR reported. 

Trump’s ‘reciprocal tariffs’

What's next:

On April 2, President Donald Trump plans to announce what he calls "reciprocal" tariffs to match the tariffs, taxes and subsidies provided by other countries. This may potentially increase the tariff rates charged globally while maintaining the risk of a broader tariff.

Tariffs on Mexico and Canada take effect

The backstory:

President Donald 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%.

RELATED: What companies are saying about tariff price hikes: Full list

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 U.S. trade deficits.