Trump announces 25% auto tariffs
President Trump issued an executive order that the US will impose an additional 25% tariff on imports of autos and key auto parts.
Commerzbank Economic Research
03/28/2025
Trump increases car tariffs
Yesterday, Donald Trump announced additional tariffs on the import of cars and car parts , which means that these tariffs are in addition to existing tariffs:
- From April 3, an additional tariff of 25% will be levied on the import of cars and light trucks from all countries.
- For passenger vehicles and light trucks from Canada and Mexico that are imported under the North American Free Trade Agreement USMCA, the increased tariff will apply only to the non-US value added portion upon request.
- By May 5 at the latest, an additional 25% tariff will be imposed on the import of auto parts from all countries except Mexico and Canada. A list specifying the parts affected will be published soon, but engines, transmissions and electronics have already been mentioned.
- Tariffs for auto parts from Canada and Mexico will only affect non-US value added. No date or details are known yet.
Who will be affected?
The US imports finished automobiles (here: passenger vehicles and light trucks up to 5 tons) primarily from Mexico, Japan, South Korea, Canada and Germany. The restriction applies to imports from Mexico and Canada that only the non-US value added portion should be affected. This is not yet taken into account in the chart. Accordingly, either Mexico ($57 billion in exports) or Japan ($41 billion) could be most affected. In any case, exporters in Canada and Mexico cannot count on an exemption for their domestic value added. Germany follows in fifth place ($26 billion). Other EU countries such as Italy and Sweden ($4 billion each) will be less affected. Since all countries in the world are affected, it is likely to be difficult for countries like Germany to redirect cars to third countries and sell them there.
It will hardly be possible in the future to circumvent the tariffs by importing car parts and assembling them in the US. Since a precise list of the car parts affected has not yet been provided, we are basing our analysis on the broadest possible definition. Here, too, imports from Mexico ($46 billion) play the biggest role. A tariff on these car parts is also likely to have a significant impact on the competitiveness of US carmakers. After all, Germany exports around $8 billion worth of car parts to the US.
For full text see attached PDF-Version.
