Tariff costs are taking an increasingly heavy toll on automakers, according to the Mexican industry and an analysis by the U.S. Congress.
President Donald Trump imposed 25% tariffs on all vehicle imports, effective April 2025, with exemptions for U.S. content in vehicles that comply with the USMCA; and on certain auto parts, effective May 2025, with exemptions for auto parts that comply with the USMCA.
Tariff costs
An analysis by the U.S. Congress indicates that tariffs imposed during the Trump administration have generally increased costs for automotive companies and may increase costs for some consumers.
Automakers’ global supply chains may expose vehicles and components to tariffs. Some automakers, suppliers, and dealerships have absorbed the costs of the tariffs and avoided passing them on to consumers. But the analysis adds that several industry stakeholders anticipate increases in consumer prices in the short term, whether through increases in manufacturers’ suggested retail prices or other fees.
Mexico is subject to 25% Section 232 tariffs, while also having to comply with the strictest rules of origin of any trade agreement, which drives up production costs.
In mid-May 2026, Rogelio Garza, president of the Mexican Automotive Industry Association (AMIA), made a strong statement on the matter. “We need to look at this very carefully, because right now all companies are absorbing the impact of the tariffs; that cannot be permanent, because then it will start to be reflected in both vehicle costs and vehicle prices,” he warned.
Integration into the USMCA
As the tariff environment has evolved, some automakers that have absorbed these costs have sought relief from the Trump Administration.
The analysis shows that tariffs on Canada and Mexico (compared to other countries) could generally have greater implications for U.S. automakers due to their regionalized supply chains.
Meanwhile, tariffs on other countries could have greater implications for foreign automakers, as these manufacturers have a higher proportion of imports from outside the USMCA region.