-
Email
Linkedin
Facebook
Twitter
Copy Link
US imports of automobiles and automotive parts will face a 25% tariff beginning April 3, according to a proclamation by the White House on Wednesday, March 26. This new policy escalates a growing trade war between the US and its largest trading partners. Further tariff notices are expected from the White House on April 2, with the announcement of “reciprocal” tariffs aimed to shrink US trade deficits on a country-by-country basis. Tariffs will be on fully assembled vehicles and parts: The initial automotive tariffs will target fully assembled vehicles. The scope will expand on May 3 to include automobile parts, such as engines, transmissions, powertrain components, and electrical systems. Mexico and Canada will not be exempt from tariffs: However, there will be some preferential treatment under the US–Mexico–Canada Agreement (USMCA) for “US content” included as parts within the total automobile; 25% tariffs would be placed on non-US content from Canada and Mexico. The Administration expects to develop a plan to deal with parts that cross the borders of the three countries multiple times. It is typical for US car companies to develop and assemble automotive parts in plants across North America. Some notable models from US automakers finish assembly in Mexico and Canada, including Chevrolet Silverado pickup trucks and the Jeep Compass. The TCB take: Yes, prices will go up. Automakers and industry analysts say the combination of tariffs and a shift to more domestic US manufacturing will raise automobile prices. One recent analysis expects prices for North American–assembled automobiles to increase by $5,000 to $12,200 each, while vehicles imported from Europe and Asia could see prices climb by $3,000. Luxury Italian sports car maker Ferrari quickly announced that it would raise prices by 10% on some models in response to US levies. Besides Italy, which ranks eighth as a source of US auto imports, the trading partners outside of North America to be most impacted by tariffs include Japan, South Korea, and Germany. (See chart below.) Source: Tradeimex and The Conference Board
Members of The Conference Board get exclusive access to Trusted Insights for What’s Ahead® through publications, Conferences and events, webcasts, podcasts, data & analysis, and Member Communities.
Cutting Discretionary Spending to Offset Higher Prices
March 28, 2025
Administration acts with Congress to reverse methane fee
March 25, 2025
Fed Keeps Cutting Bias amid “Transitory” Tariff Inflation
March 19, 2025
Retail Sales Show Consumers Are More Frugal amid Uncertainty
March 17, 2025
The EU's Retaliatory Tariffs Will Hit Beef, Bourbon and More
March 14, 2025
February CPI Offers Some Reprieve
March 12, 2025
Charts
The proliferation of easy-to-use generative AI requires that policymakers and business leaders each play an important role.
LEARN MORECharts
A hyperpolarized environment, diminished trust in our nation’s leaders.
LEARN MOREIN THE NEWS
Steve Odland: Tariffs to cost U.S. manufacturers $144 billion annually
February 03, 2025
PRESS RELEASE
CED Maps Out 2025 Policy Plan for New President and Congress
January 23, 2025
IN THE NEWS
If the election is contested again in November, will corporate leaders push…
October 21, 2024
Commentary and Letters
The Biggest Problem Trump and Harris Aren’t Talking About
October 15, 2024
Commentary and Letters
Letter to Presidential Candidates Regarding US Fiscal Health
October 04, 2024
IN THE NEWS
Public & private sectors must prepare for AI-powered election attacks
October 31, 2023