AutoTechInsight
Rapid Response: Impact analysis of US automotive trade/tariff actions - Issue #8
With U.S. trade policy in flux, new tariffs continue to reshape the automotive landscape. On April 3, a 25% tariff on all light-vehicle imports, from all countries, comes into effect, and reprieve for USMCA-compliant vehicle imports ends. However, CBU tariff will be based on value of vehicle less the value of any US-sourced content. Additionally, starting May 3, a 25% tariff on automotive parts comes into force. For USMCA-compliant vehicles, tariff will be based on
value of vehicle less the value of any US-sourced content, once the US develops a system for tracking this.
The US has intensified trade uncertainty with escalating tariffs and shifting policies as the Trump administration continues to signal a hard-line stance on trade.
US President Donald Trump has imposed a 25% tariff on imports of automobiles and certain automobile parts, with tariffs to come into effect from April 3, according to a statement released by the White House. The statement added that the 25% tariff will be applied to imported passenger vehicles including sedans, sport utility vehicles (SUVs), crossovers, minivans, cargo vans and light trucks, as well as key automobile parts such as engines, transmissions, powertrain parts and electrical components. It said that the Trump administration is open to further expanding the tariffs on additional parts, if necessary.
The statement said that with the import tariffs on vehicles and automotive components, President Trump aims to protect America’s automobile industry, which is vital to national security and has been undermined by excessive imports threatening America’s domestic industrial base and supply chains. The announcement comes weeks after the Trump Administration had reinstated 25% tariffs on the import of steel and aluminum, citing that America’s critical steel and aluminum industries were harmed by unfair trade practices and global excess capacity.
This report provides an updated assessment of the evolving tariff landscape, its impact on North American supply chains, and the potential consequences of the upcoming April 3 announcements. S&P Global Mobility’s scenario expectations have been adjusted accordingly in this latest analysis.
