U.S.-based Lear Corporation described the impact of auto parts tariffs applied by U.S. Customs.
With revenues of US$6.03 billion in the second quarter of 2025 (flat year-on-year), Lear is a global supplier of automotive technology. It designs and manufactures seating and electrical systems for vehicles. It works with almost all of the world’s major automotive brands.
Impact of auto parts tariffs
The vast majority of Lear’s Seating and Electrical Systems business products comply with the requirements of the Mexico-U.S.-Canada Agreement (USMCA) and are therefore exempt from the Mexico/Canada tariff.
In addition, the vast majority of the products of its Seating business are not subject to the Auto Parts Tariff.
However, the latter applies to wire harnesses that the company assembles in its Electrical Systems business and imports into the United States.
The wire harnesses that Lear imports from Mexico are free of the Auto Parts Tariff. They comply with the USMCA rules of origin. However, the same is not true for those coming from Honduras. Those imports are subject to tariffs, which considerably raises the cost of sales in the Electrical Systems business.
But there is an additional risk. If the Auto Parts Tariff exemption is modified to apply only to U.S. content, harnesses from Mexico could also be affected. This would have a direct impact on company costs within the same segment.
Additional measures
Other sectoral tariffs could generate additional pressure. Although their effect is less than that of the Auto Parts Tariff, they could raise certain operating costs. These include the Mexico/Canada, Steel/Aluminum, China, Reciprocals and Copper Tariffs.
These levies affect relevant inputs. For example, imported steel and aluminum parts, products originating in China or goods not covered by the USMCA. Copper imports and products subject to reciprocal measures are also included.
Beyond the cost of sales, the effects can escalate. If these tariffs affect vehicle production or create supply chain disruptions, they could reduce net sales and affect other Lear financial metrics.