After a month’s reprieve, the U.S. autos industry is again staring down 25% tariffs on imports from Mexico and Canada, levies that would inject costs into the industry’s highly integrated North American supply chain.
President Trump has said the tariffs would take effect Tuesday. The Canada and Mexico levies, if fully applied to vehicles and car parts, are the most immediate of several tariff scenarios facing the industry.
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Trump also is planning to add 25% tariffs on imports of steel and aluminum, key materials in vehicles, on March 12. The president has also floated “reciprocal tariffs” to match duties of other countries and sector-specific tariffs that would include the auto industry. Tariffs on Chinese imports also are headed higher.
The umbrella of tariffs would raise costs for foreign- and U.S.-built vehicles, because even domestic cars include a significant amount of parts and content from abroad. The levies on Mexico and Canada alone could add around $3,000 to the average U.S. car price, analysts estimate.
Here is a look at the industry’s North American trade landscape:
Slightly more than half of U.S.-sold vehicles are built in the U.S.
Mexico is the largest exporter of finished vehicles to the U.S., including many popular models by U.S. manufacturers such as the Chevrolet Equinox, Ford Bronco Sport and some Ram pickups. The other major foreign sources of vehicles are South Korea, Japan, Canada and Germany.
Some carmakers rely heavily on Mexico, Canada for U.S. sales
Nearly a quarter of new passenger vehicles sold in the U.S. in 2024 were assembled in Mexico or Canada. Carmakers with above-average reliance on the two countries include Volkswagen, Stellantis, Honda and General Motors.
U.S.-built vehicles have lots of foreign parts
Tesla, run by Trump ally Elon Musk, builds all of its U.S.-sold cars domestically, but those cars include about 20% of parts and components from Mexico, according to a U.S.-mandated auto labeling program overseen by the National Highway Traffic Safety Administration.
Federal auto-labeling requirements show that a significant percentage of parts in some popular U.S. vehicle models originate outside the U.S.