A 25 percent tariff on many imported automotive parts is set to take effect within the next week, according to Automotive News.
These new parts tariffs come on the heels of vehicle tariffs that began on April 3, following earlier tariffs on steel and aluminum introduced by the Trump administration in March.
Tariffs on a broad range of auto parts are expected to roll out by May 3, the White House said.
What do the auto parts tariffs involve?
A 25 percent tariff will be imposed on various vehicle components by May 3, the deadline set by President Donald Trump for the Commerce Department and U.S. Customs and Border Protection to start enforcing it, Automotive News said.
Similar to the 25 percent tariffs already applied to vehicle imports, the new parts tariffs include a significant exemption for Canadian and Mexican products, according to the White House.
Parts imported from Canada and Mexico that meet the United States-Mexico-Canada Agreement (USMCA) duty-free trade terms will be exempt from the tariffs, at least for now, according to U.S. Customs and Border Protection.
However, the Commerce Department plans to create a system in the future to apply tariffs based on the non-U.S. content of those parts, Automotive Logistics said.
Parts from other countries, as well as Canadian and Mexican parts that don’t meet USMCA requirements, will face a tariff on the full value of the component, according to the White House.
In 2023, roughly 21 percent of parts from Canada and Mexico did not qualify for USMCA’s tariff-free provisions, according to a 2024 report from the Office of the U.S. Trade Representative.
What parts are affected by the tariffs?
The tariffs apply to a wide range of parts, including engines, transmissions, powertrain components, and electrical systems, the White House said.
For a detailed list of specific parts and their trade codes, you can refer to the Harmonized Tariff Schedule of the United States. [Click here to view the list of parts impacted by the tariffs.]
Parts covered by the auto tariffs are exempt from the 10 percent baseline tariffs that President Trump imposed on most trading partners, as well as the 125 percent “reciprocal tariff” on Chinese goods, according to Yahoo Finance.
Certain components, such as some braking parts and advanced driver-assist systems, are not included in the auto tariff order. These items are subject to the tariffs imposed on U.S. trading partners, unless they originate from Canada or Mexico and comply with USMCA terms, the United States Trade Representative said.
What impact could the parts tariffs have on the auto supply chain?
For months, auto executives and analysts have raised concerns that widespread tariffs on parts would severely strain global supply chains and have catastrophic effects on the industry, according to Automotive News.
These concerns were echoed in a letter sent to the Trump administration on April 21, signed by a coalition of trade organizations representing automakers, suppliers, and dealers.
The letter warned that parts tariffs could result in production halts, job losses, supplier bankruptcies, higher prices for new vehicles, and reduced demand, Carscoops said.
Is the White House exploring options for relief from auto tariffs?
The administration is exploring options for auto tariff relief, but it’s still uncertain what shape it will take or whether Trump will approve any measures, according to AP News.
Trump has mentioned considering relief for auto manufacturers, but the specifics remain unclear, CNBC said.
