automakers

Canadian PM Carney also announced a fund of $5 billion in Canadian dollars ($3.6bn US) to help firms in all sectors hurt by tariffs.

Canada will waive a requirement that 20 percent of all vehicles sold next year be emissions-free, part of an aid package designed to help companies deal with damage done by tariffs from United States President Donald Trump.

Prime Minister Mark Carney made the announcement on Friday.

The 20 percent target was mandated by the Liberal government of then-Prime Minister Justin Trudeau in 2023.

Carney, Trudeau’s successor, said waiving the rule would help the industry deal with punitive US measures that are also targeting the steel and aluminium sectors.

“This will provide immediate financial relief to automakers at a time of increased pressures on economic competitiveness,” Carney told a televised press conference.

Ottawa will also launch an immediate 60-day review to reduce costs linked to the EV sales requirement.

The Canadian Vehicle Manufacturers’ Association welcomed the move, saying the push for mandates imposed unsustainable costs on companies and threatened investment.

Carney said it was too soon to draw any conclusions about whether Ottawa should lift the 100 percent tariffs it imposed on Chinese-made electric vehicles last year. China on Friday prolonged a probe into imports of canola from Canada, one of the world’s leading suppliers.

Carney, who won an April election on the need to diversify the economy away from the US, said Ottawa would set up a new fund worth $5 billion Canadian dollars ($3.6bn US) with flexible terms to help firms in all sectors affected by tariffs.

The US measures are “causing extreme uncertainty that is holding back massive amounts of investment”, he said.

Ottawa will introduce a new policy to ensure the federal government buys from Canadian suppliers and is also introducing a new biofuel production incentive, with more than $370 million Canadian dollars ($267m US) for farmers to address immediate competitiveness challenges.

Carney did not mention specific new aid for the steel and aluminium sectors. When pressed, he said companies could apply for help from existing funds.

Several global automakers, including Mercedes-Benz and Stellantis, have joined Michigan-based General Motors and Volvo in suspending their respective annual financial guidance reports for investors amid growing tariff uncertainty.

The announcements on Wednesday came even as US President Donald Trump signed an executive order on Tuesday to soften the blow of the auto tariffs that he had imposed earlier this month.

“While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the US administration to strengthen a competitive American auto industry and stimulate exports,” Stellantis board chairman John Elkann said in a statement.

Stellantis said it was “suspending its 2025 financial guidance … due to evolving tariff policies, as well as the difficulty predicting possible impacts on market volumes and the competitive landscape.”

This comes amid layoffs at Stellantis, a carmaker that houses 14 brands including Jeep, RAM Trucks, Dodge, Fiat, and Maserati. In April, it temporarily laid off 900 workers for two weeks and said at the time it was because of uncertainty about how Trump-imposed tariffs would affect its business.

Antonio Filosa, Stellantis’s chief operating officer for the Americas, said in a company-wide email that it would assess the medium- and long-term effects of these tariffs on its operations, but also have “decided to take some immediate actions”.

The company reported a 14-percent drop in its first-quarter sales to $40.7bn (35.8bn euros) in its first-quarter earnings report released on Wednesday.

Mercedes-Benz and Volkswagen, Europe’s biggest carmakers, reported big drops in their net profits over the same January-March period, before the US tariffs kicked in.

Mercedes cited “volatility with regard to tariff policies” that meant business development could not be reliably forecast. Mercedes’s net profit plunged almost 43 percent in the first three months of the year to $1.9 bn (1.73 billion euros)

Finance chief Harald Wilhelm said Mercedes still remains in a strong position, thanks to what he said was a strong position in profitable, top-end vehicles.

“This, combined with a healthy balance sheet, provides a solid foundation to navigate our company through a period of geopolitical uncertainties,” he said.

‘Towards the lower end’

About 40 companies worldwide, across industries, have pulled or lowered their forward guidance in the first two weeks of the first-quarter earnings season, an analysis by the news agency Reuters showed. On Tuesday, social media giant Snap declined to offer future guidance, saying it was seeing a slowdown in ad spending and raised doubts about advertising budgets due to tariff impact, sending its stock down 15 percent on Wednesday.

Before the tariffs, European automakers were already facing slowing sales of electric cars and stiff competition from local rivals, as well as from Chinese EVs, for which it is a key market. Volkswagen, a 10-brand group that includes Audi, Skoda and Porsche, said its net profit fell 40.6 percent to $2.49bn (2.19 bn euros).

For the rest of the year, the carmaker said that it expected business “towards the lower end” of its guidance, citing challenges including increased competition, more stringent emissions regulations and trade tensions.

Speaking on a call for analysts and investors, Volkswagen’s finance chief Arno Antlitz said that it was “too early to say” if Volkswagen would step up manufacturing in the US to circumvent any tariffs.

Volkswagen expects a profit margin of 5.5 to 6.5 percent for the coming year, but its guidance does not take into account changeable American tariffs.

“It’s highly difficult to give a projection for the full year,” Antlitz said.

UBS analyst Patrick Hummel wrote in a client note that the German group’s outlook did not “include any impact of US tariffs,” calling it “essentially a withdrawal of guidance”.

In the United Kingdom, luxury carmaker Aston Martin Lagonda announced that it was limiting shipments to the US, but it maintained its annual guidance as it reported a 13-percent drop in first-quarter revenue.

Easing some tariffs

Besides a 25-percent tariff on finished imported cars, the industry has also been affected by Trump’s 25-percent tariff on steel and aluminium.

Carmakers are also set to face new tariffs on foreign auto parts expected to take effect on May 3.

Trump’s new policy means that a company would not face both a 25-percent levy for an imported vehicle and 25-percent on steel or aluminium. The importer would pay the higher of the two levies, but not both, a US Commerce Department official said.

The other change is that companies that import parts for vehicles assembled in the US would be able to offset 3.75 percent of a vehicle’s list price in the first year and 2.5 percent in the second year.

But analysts believe that this reprieve won’t necessarily work in practice as automakers face the effect tariffs will have on their business.

“While this sounds good on paper (less bad then the original auto tariff slate), a US car with all US parts made in the US is a fictional tale not possible today and many factories/production hubs could take 4-5 years to build in the US … and this speaks to the massive frustration from the industry as the rules of the US tariff game are untenable in our view,” Wedbush Securities Dan Ives said in a note on Wednesday.

WASHINGTON — President Trump signed executive orders Tuesday to relax some of his 25% tariffs on autos and auto parts, the White House said, a significant reversal as the import taxes threatened to hurt domestic manufacturers.

Automakers and independent analyses have indicated that the tariffs could raise prices, reduce sales and make U.S. production less competitive worldwide. Trump portrayed the changes as a bridge toward automakers moving more production into the United States.

“We just wanted to help them during this little transition, short term,” Trump told reporters. “We didn’t want to penalize them. ”

Treasury Secretary Scott Bessent, who spoke earlier at a White House briefing Tuesday, said the goal was to enable automakers to create more domestic manufacturing jobs.

“President Trump has had meetings with both domestic and foreign auto producers, and he’s committed to bringing back auto production to the U.S.,” Bessent said. “So we want to give the automakers a path to do that, quickly, efficiently and create as many jobs as possible.”

Trump signed one order Tuesday that amended his previous 25% auto tariffs, making it easier for vehicles that are assembled in the U.S. with foreign parts to not face prohibitively high import taxes.

The amended order provides a rebate for one year of 3.75% relative to the sales prices of a domestically assembled vehicle. That figure was reached by putting the 25% import tax on parts that make up 15% of a vehicle’s sales price. For the second year, the rebate would equal 2.5% of a vehicle’s sales price, as it would apply to a smaller share of the vehicle’s parts.

A senior Commerce Department official, who insisted on anonymity to preview the order on a call with reporters, said automakers told Trump that the additional time would enable them to ramp up the construction of new factories, after automakers warned that it would take time for them to shift their supply chains. The official said automakers would, over the next month, announce additional shifts for workers, new hires and plans for new facilities.

Stellantis Chairman John Elkann said in a statement that the company appreciates the president’s tariff relief measures.

“While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the U.S. Administration to strengthen a competitive American auto industry and stimulate exports,” he said.

General Motors Chief Executive Mary Barra said the automaker is grateful for Trump’s support of the industry, adding that the company looks forward to conversations with the president and working with the administration.

“We believe the President’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the U.S. economy,” Barra said in a statement.

Jim Farley, president and CEO of Ford Motor Co., stressed that his company does more than its peers to manufacture domestically.

“We will continue to work closely with the administration in support of the president’s vision for a healthy and growing auto industry in America,” Farley said. “As the right policies are put in place, it will be important for the major vehicle importers to match Ford’s commitment to building in America. If every company that sells vehicles in the U.S. matched Ford’s American manufacturing ratio, 4 million more vehicles would be assembled in America each year.”

But changing direction doesn’t help an industry that thrives on stability, said Sam Fiorani, analyst at business forecasting firm AutoForecast Solutions.

“Finding a way to get the auto industry back working has to be paramount in this,” Fiorani said. “The tariffs have not looked at this industry, the way it works, and expect it to be able to jump and relocate production at the blink of an eye. It just doesn’t work that way.

“Making a production change for vehicle manufacturing takes [at] minimum, months, and usually years, along with hundreds of millions if not billions of dollars,” he added. “And so it is not something that they take lightly.”

The Wall Street Journal first reported details of the actions. The White House’s Rapid Response account on X said Trump signed an order Tuesday afternoon to prevent his various tariffs from being stacked on top of his existing taxes on imported autos and auto parts.

The tariffs imposed by Trump were seen by some as an existential threat to the auto sector. Arthur Laffer, whom Trump gave the Presidential Medal of Freedom to during his first term, said in a private analysis that the tariffs without any modifications could add $4,711 to the cost of a vehicle.

New vehicles were sold at $47,462 on average last month, according to auto-buying resource Kelley Blue Book. Tariffs stress the automotive supply chain, a complex web that spans the globe. Not only do many auto parts cross North American borders several times before being assembled into a finished vehicle, but also auto manufacturers rely on suppliers around the world for thousands of components.

Increased levies would certainly cost new-car buyers — sensitive to inflation — more, driving them to the used vehicle market and quickly straining the availability of preowned cars. Tariffs also affect the cost of owning and maintaining a vehicle.

The modifications come as Trump marks 100 days back in the White House by going to Michigan, a state defined by auto manufacturing. Trump won the state in last year’s election by promising to increase factory jobs.

Still, it remains unclear what effect Trump’s broader tariffs will have on the U.S. economy and auto sales. Most economists say the tariffs — which could ultimately hit most imports — would raise prices and slow economic growth, possibly hurting auto sales despite the relief that the administration intends to offer on its previous policies.

Boak and St. John write for the Associated Press. St. John contributed to this report from Detroit.