President Donald Trump revealed plans today for a 25% tariff on vehicles and specific auto parts coming into the U.S. It kicks in on April 3, 2025. The White House says it’s about boosting U.S. manufacturing and fixing trade gaps in the auto industry. They’re using national security as the reason, based on Section 232 of the Trade Expansion Act of 1962.
What’s covered?
Passenger cars like sedans, SUVs, crossovers, minivans, cargo vans, and light trucks. Plus parts – engines, transmissions, powertrain pieces, and electrical components. Last year, Americans bought around 16 million cars, SUVs, and light trucks. Half of them, 8 million, came from outside the U.S. For the 8 million made here, only about 50% of the content is domestic, probably closer to 40%. That means just 25% of all vehicle content sold in the U.S. is American-made.
The White House points to a $93.5 billion trade deficit in auto parts from 2024. Jobs in that sector dropped too, down 286,000 since 2000, from 553,300 to 34% less last year. The tariff aims to push companies to build more in the U.S. But some worry car prices will climb. After the news, stocks for General Motors, Ford, and Stellantis fell.
For Mexico and Canada, tied to the U.S. through the USMCA trade deal, it’s different. The tariff hits only non-U.S. content. Importers can certify what’s made here to cut the cost. NPR says the details on how to do that are still coming from the Secretary of Commerce and U.S. Customs and Border Protection. Until then, USMCA parts stay tariff-free.
Other countries aren’t happy
Canada’s Prime Minister Mark Carney called it a “direct attack” and promised to protect Canadian interests. Japan’s auto group warned it could hurt both the U.S. and Japanese economies. Europe’s Ursula von der Leyen said,
“Tariffs are taxes-bad for businesses, worse for consumers equally in the U.S. and the European Union,”
according to Newsweek.
The United Auto Workers union likes it
They think it could mean more work at U.S. plants with extra space, and people are talking about higher prices and a possible trade war on social media platforms.
Trump floated bigger tariffs, 100% or 200% on cars, last year. This 25% is a step in that direction, but not as steep.
Tariff Details Laid Out
Here’s the breakdown from the White House fact sheet:
| Category | Details |
|---|---|
| Tariff Rate | 25% on cars and certain parts from abroad |
| Vehicles Hit | Sedans, SUVs, crossovers, minivans, cargo vans, light trucks |
| Parts Included | No tariff until the certification process is set |
| USMCA Rules | Certify U.S. content to lower the tariff; applies only to non-U.S. portions |
| USMCA Parts | Around 50%, likely nearer 40%; 25% of the total content is American |
| Legal Ground | Section 232 of the Trade Expansion Act of 1962 |
| Auto Parts Trade Deficit (2024) | $93.5 billion |
| U.S. Vehicle Sales (2024) | 16 million cars, SUVs, light trucks; half were imports (8 million) |
| Domestic Content in U.S.-Made Vehicles | Around 50%, likely nearer 40%; 25% of total content is American |
| Auto Parts Jobs (2024) | 553,300, down 286,000 (34%) since 2000 |
| U.S. Makers’ R&D (2023) | 16% of global spending, compared to 53% from the EU |
You may also like to read:
- Financial Times Retracts Tesla Accounting Allegations »
- Tesla Tops 2024 List for Most American-Made Vehicles »
- SpaceX Plans New Starlink Dish with Gigabit Speeds »
We’ve launched an official Tesla Owners Online Forum. Join early and claim your "Founding Fuel" badge.
