U.S. President Donald Trump announced a 25% tariff on all light-duty vehicles imported into the U.S. The administration will begin collecting U.S. auto import tariffs on April 3. For automotive parts, the tariffs will go into effect no later than May 3. These U.S. auto import tariffs apply to all countries, including Canada and Mexico.

A clause allows for reduced tariffs on vehicles that include U.S.-produced components, as long as those parts comply with USMCA free-trade rules of origin. These tariffs add to any that already exist.

Long-Term Trade Shifts Expected from Persistent Tariffs

President Trump has not specified when the tariffs might end. S&P Global Mobility experts predict high and lasting tariffs with few exemptions. They expect these tariffs to become the new standard for automotive trade.

The policy increases costs for importing vehicles and raises domestic manufacturing expenses. Consumers may see higher vehicle prices as a result.

S&P Global Mobility forecasts that U.S. light-vehicle sales could drop to between 14.5 and 15 million units annually in coming years.

Tariffs Reshape North American Automotive Supply Chains

The proposed tariffs could restructure the automotive value chain across North America and beyond. Vehicles built in Canada or Mexico may qualify for lower tariffs if they include U.S.-made, USMCA-compliant parts. This condition could help maintain trade flows and regional investment.

President Trump stated firmly that these tariffs would remain during his presidency. Automakers and suppliers, though facing challenges, now have a more stable outlook for tariff-related decision-making.

U.S. Auto Import Tariffs Impact: Nearly Half of Vehicle Sales at Risk

In 2024, U.S. consumers purchased 16.03 million light vehicles. Manufacturers built 54% of those in the U.S., while 46% were imported.

Based on 2024 data, nearly half of U.S. vehicle sales could be subject to U.S. auto import tariffs.

The U.S. received most of its vehicle imports from Mexico, South Korea, Japan, and Canada. In 2024, Volvo, Mazda, Volkswagen, and Hyundai Motor (including Genesis and Kia) each imported over 60% of their U.S. sales.

Meanwhile, Ford, General Motors, Toyota, Honda, and Stellantis built the most vehicles in the U.S., accounting for 67% of domestic production.