Rapid response: Impact analysis of US automotive trade/tariff actions - Issue 6

S&P Global Mobility’s latest analysis provides a comprehensive update on the rapidly evolving trade landscape following the full implementation of U.S. tariffs on Canadian and Mexican imports.

The U.S. has officially imposed a 25% tariff on all non-compliant imports from Canada and Mexico as of March 4, 2025, following a month-long delay. Autos compliant with USMCA free-trade requirements have their tariffs delayed for 30 days, while all other compliant goods have their tariffs delayed to April 2. Canadian oil received a reduced 10% tariff, but no exemptions were granted for other sectors. Additionally, the U.S. has raised tariffs on Chinese automotive imports by 10%, now reaching 20% for most vehicles and up to 100% for BEVs. The planned elimination of de minimis exemptions and the removal of duty drawback further increase cost pressures on cross-border production.

In response, Canada has implemented 25% tariffs on key U.S. goods, with a second wave targeting passenger vehicles and trucks in three weeks. Mexico’s countermeasures remain undisclosed but are expected soon. Upcoming tariffs include a 25% tariff on steel and aluminum effective March 12, with no exceptions, and a 25% tariff on autos expected April 2, which will include USMCA-compliant auto products from Canada and Mexico, as well as imports from the UK, EU, Japan, South Korea, and India.

This report examines the immediate and long-term impacts of these escalating trade tensions on vehicle production, supply chains, and market dynamics.