Rapid Response: Impact analysis of US automotive trade/tariff actions - Issue #9

On April 3, 2025, the Section 232 tariffs on automobiles came into effect, imposing a 25% tariff on light-duty vehicles from all countries, including Canada and Mexico, while medium and heavy-duty vehicles remain exempt. The automotive parts sector will see these tariffs applied starting May 3, with a provision allowing for additional parts to be included within 90 days of the March 26 proclamation. Notably, if vehicles meet USMCA compliance, the tariff's impact may be mitigated by accounting for the value of US-sourced content, highlighting the significance of the North American integrated supply chain. Additionally, reciprocal tariffs will be set at a 10% baseline starting April 5, with country-specific tariffs following on April 9. This complex tariff landscape is expected to have broader economic implications, while the S&P Global Mobility forecasts have already factored in a universal 10% tariff since December 2024, reflecting the anticipated effects of these recent developments on the automotive sector and beyond.