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President Donald Trump on Wednesday granted U.S. automakers a one-month reprieve from tariffs he imposed the previous day, which include 25% duties on imports from Canada and Mexico and an increase in tariffs on Chinese imports to 20%.

“We are going to give a one month exemption on any autos coming through USMCA,” White House Press Secretary Karoline Leavitt said, referring to a trade agreement with Canada and Mexico signed during Trump’s first term.

“Reciprocal tariffs will still go into effect on April 2, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage,” she said during a press conference .

Trump talked by phone on Wednesday morning with the chief executives of Ford, General Motors and Stellantis, Leavitt said.

“They requested the call, they made the ask and the president is happy to do it,” she said.

The tariffs have prompted worries among companies throughout the economy about a resurgence of price pressures.

“American families and businesses are struggling with high costs — it’s one of the top issues that they want policymakers to address,” Neil Bradley, chief policy officer at the U.S. Chamber of Commerce , said Monday in a statement.

“Tariffs will only raise prices and increase the economic pain being felt by everyday Americans across the country,” he said. “We urge reconsideration of this policy and a swift end to these tariffs.”

The import duties enacted on Tuesday, along with 10% tariffs on goods from other countries, could push up the price of food, beverages and other everyday retail goods by 0.81 percentage point to 1.63 percentage points, according to A tlanta Fed researchers.

Companies based in New York and New Jersey expect the consumer price index to rise between 3.5% to 4% in the next 12 months, according to the New York Fed. They “expect both cost and price increases to move higher in 2025.”

In February 2024,  the companies forecast just a 3% year-ahead increase in the CPI, the district bank said, adding that longer-term inflation expectations held steady at around 3%. Fed policymakers seek to limit inflation to 2%.

Among both company executives and consumers, discussion about tariffs “is clearly influencing how people are thinking about inflation this year,” New York Fed President John Williams said Tuesday during a Bloomberg webcast.

“I'm not seeing as much of an indication in most of these surveys that that's about long run inflation or inflation in the future, but more about inflation in the near term,” he said.

The harm from import duties may extend well beyond inflation, analysts at Bank of America Securities said Wednesday in a client note.

“The escalating trade conflict introduces risks to U.S. supply chains, inflation and corporate earnings, with potential near-term slowdown in consumer spending due to negative headlines,” they said.

Trump in his state of the union address on Tuesday acknowledged that import duties will cause some disruption, but brushed off such costs as worth the gains.

“ Tariffs are about making America rich again and making America great again,” he said. “There'll be a little disturbance. We're okay with that. It won't be much.”

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