Tariffs on Auto Sector Temporarily Exempt Mexico and Canada

25% Tariffs on the Auto Sector Take Effect April 2
Temporary Exemption for Parts from Mexico and Canada
Cars Must Disclose US Content Value

The administration of Donald Trump will implement a 25% tariff on automotive imports beginning April 2.

However, auto parts manufactured in Mexico and Canada will be temporarily exempt from this measure, according to the executive order signed Wednesday by the US president.

According to the document, the 25% tariffs “will not apply to auto parts that qualify for preferential treatment under the USMCA.”

This, until authorities establish a procedure to tax only the value of non-US content within those parts.

25% Tariffs on the Auto Sector Exempt Mexico and Canada

UPDATE

Auto parts manufactured in Mexico and Canada will be temporarily exempt from the 25% tariffs that the Trump Administration will begin enforcing on April 2.

Information: https://t.co/zbjrwrrxuz pic.twitter.com/m2JZPBTQ7

-Joaquín López-Dóriga (@lopezdoriga) March 26, 2025

President Trump has not yet determined when this procedure will be ready, leaving manufacturers and exporters in a state of uncertainty.

Meanwhile, vehicles assembled in Mexico and Canada will be subject to a partial tax, as tariffs will be imposed on the content not originating in the United States.

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The executive order also stipulates that importers must identify “the value of the US content in each imported model.”

“‘US content’ is defined as the value of the vehicle attributable to parts wholly obtained, entirely produced, or substantially transformed in the United States,” the decree explains.

Once that value is determined, the 25% tariff will apply only to the portion of the vehicle composed of non-US materials, according to EFE.

During the signing of the order in the Oval Office, Trump claimed the measure could generate between $600 billion and $1 trillion for the US over the next two years.

He also sharply criticized European manufacturers, hinting that similar actions may be forthcoming.

“We buy millions and millions of their cars—BMW, Volkswagen, Mercedes-Benz. And they have non-monetary tariffs that make it nearly impossible for us to sell cars in Europe,” he stated. “The European Union treats us horribly on trade,” he concluded.