Key Details on the New U.S Tariffs: What to Expect

1. Tariff of 25% on All Imports from Canada & Mexico

• Effective Date: March 4, 2025
• Rate: 25% on all imported goods—no exceptions
• Applies at Every Stage: The tariff is charged each time a component crosses the border. That means raw materials, modules, and fully assembled vehicles will all be subject to the tax as they move through production.

2. How This Impacts Vehicle Costs

• U.S.-Assembled Vehicles (Using Imported Parts)
• Added cost: Estimated at $3,000+ per vehicle
• Canada/Mexico-Assembled Vehicles
• Added cost: Estimated at up to $10,000+ per vehicle

3. Tariff of 25% on Imported Steel, Aluminum, and Copper

• Effective Date: March 12, 2025
• Raw Materials: As an example, bar stock of steel and aluminum
• Finished Goods: As an example, engine blocks, cylinder heads, complete engine assemblies
• Effect of This Tariff versus the Tariff on Canadian and Mexican Goods: Both tariffs would apply (25%+25%=50%)

4. Reciprocal Tariffs

• To be announced on April 2, 2025
• Would increase tariff rates of imports into the USA to match the tariffs of imports into other countries

5. Automotive Tariffs

• To be announced on April 2, 2025
• Details to be announced, could be stacked on top of existing tariffs (i.e. Canada, Mexico, China, Steel, Aluminum)

6. How These Tariffs Will Be Applied

• Applies only to imports after the effective dates. *** The importer of record (OEMs) is responsible for the payment, not foreign governments.**
• Any vehicle invoiced after March 4, 2025, will be impacted, regardless of when it was ordered or how long it sat at a dealership.

7. What This Means for the Market

Automakers are working on pricing models to determine how much of the increased costs will be passed on to consumers.

Tariffs can change without notice, creating uncertainty for production and pricing strategies. Immediate effects may include:

• Reduced production and availability
• Fewer manufacturer incentives
• Higher prices on pre-tariff inventory as demand shifts

Final Thoughts

These new tariffs will have wide-reaching effects on the cost of vehicles and the broader supply chain. Consumers, dealers, and automakers should prepare for higher prices, potential inventory shortages, and evolving manufacturer strategies in response to the increased costs.