President Donald Trump has agreed to postpone a 25% tariff on goods imported from Canada and Mexico for the next 30 days after reaching separate agreements with both countries. However, a 10% tariff on Chinese imports has officially gone into effect.
Initially, Trump had planned to impose a 25% tariff on Canadian and Mexican imports, including automobiles and automotive parts, starting February 4. If implemented, these tariffs could significantly impact vehicle prices, supply chains, and manufacturing jobs in the United States.
Which Cars Could Be Affected?
Many popular vehicles in the U.S. are built in Mexico and Canada, meaning tariffs could increase prices, production costs, and availability. Below is a breakdown of the vehicles that might be affected.
General Motors (GM)
- Chevrolet Equinox, GMC Terrain – Built in San Luis Potosí, Mexico, the Equinox was Chevy’s second-best-selling vehicle in 2024 with 207,730 sales.
- Chevrolet Silverado – Some production happens in Silao, Mexico, and Oshawa, Ontario, potentially shifting more work to Indiana and Michigan.
- Chevrolet Blazer EV, Equinox EV, Honda Prologue, Cadillac Optiq – All assembled in Ramos Arizpe, Mexico.
Ford
- Bronco Sport, Maverick – Built in Hermosillo, Mexico.
- Mustang Mach-E – Produced in Cuautitlán Izcalli, Mexico; had its best sales year in 2024 with 51,745 units sold.
Stellantis (Ram, Dodge, Chrysler, Jeep)
- Chrysler Pacifica, Dodge Charger – Manufactured in Windsor, Ontario.
- Ram HD Trucks, ProMaster Vans – Built in Saltillo, Mexico.
- Jeep Compass, Wagoneer S EV – Produced in Toluca, Mexico.
Toyota
- Lexus RX, NX SUVs – Produced in Cambridge, Ontario.
- Toyota RAV4 (non-hybrid) – Manufactured in Woodstock, Ontario.
- Toyota Tacoma – Exclusively built in Mexico.
Honda
- Honda Civic Sedan, CR-V – Built in Alliston, Ontario.
- Honda HR-V – Produced in Celaya, Mexico.
Mazda, Nissan, Volkswagen, and Luxury Brands
- Mazda 3, CX-30 – Built in Salamanca, Mexico.
- Nissan Kicks, Versa, Sentra – Assembled in Aguascalientes, Mexico.
- Volkswagen Taos, Tiguan, Jetta – Produced in Puebla, Mexico.
- Luxury Brands Affected – Infiniti QX50/QX55, Mercedes-Benz GLB, Audi Q5, BMW 2-Series Coupe (all assembled in Mexico).
Economic Impact of Tariffs on Cars and Parts
A 25% tariff on vehicles and auto parts could have serious economic consequences:
- Higher Car Prices – Prices for popular vehicles could increase significantly, making new cars less affordable.
- Supply Chain Disruptions – Automakers rely on parts from Mexico and Canada, so tariffs could slow down production.
- Job Losses in the U.S. – Increased costs could force American automakers to reduce production or cut jobs.
- Fewer Vehicle Choices – Automakers might discontinue some models with declining demand due to price hikes.
Why Was the California Tariff Vetoed?
While President Trump moved forward with the China tariff, the proposed tariffs on Canada and Mexico have been temporarily postponed due to opposition from business leaders and lawmakers.
In contrast, California lawmakers had earlier considered SB 961, which included mandatory speed limiters on new vehicles, but Governor Gavin Newsom vetoed it, citing inconvenience and inaccuracies in GPS-based enforcement systems.
What Happens Next?
- The 25% tariffs on Canada and Mexico are postponed for 30 days while further negotiations take place.
- The 10% tariff on Chinese imports is now in effect.
- Automakers will be watching closely to see if tariffs are fully implemented, modified, or abandoned.
If the tariffs go into effect, the U.S. car market could experience higher prices, disruptions, and shifts in manufacturing strategies.
FAQ’s
What is the latest update on the Trump tariffs on Canadian and Mexican imports?
President Trump has postponed a 25% tariff on imports from Canada and Mexico for 30 days. However, a 10% tariff on Chinese imports has gone into effect.
Which cars could be affected by the 25% tariff?
Many popular cars, including the Chevy Equinox, Ford Bronco Sport, Toyota Tacoma, and Honda Civic sedan, are built in Canada and Mexico and could see price increases if tariffs are implemented.
How would tariffs impact car prices in the U.S.?
A 25% tariff would likely increase new car prices, disrupt supply chains, and lead to potential job losses in the U.S. auto industry.
Why did Trump propose these tariffs?
Trump aims to encourage more U.S.-based manufacturing and reduce reliance on imported goods, but critics argue it could harm the auto industry and consumers.
Is there a chance the tariffs will be canceled?
The tariffs have been postponed for 30 days as negotiations continue. Automakers and trade officials are working on alternatives to avoid long-term implementation.