In a major update for the automotive industry 🌍🚗, the U.S. has granted exemptions to Canadian and Mexican auto parts from President Donald Trump’s controversial tariffs—but only if they meet the terms of the Canada-U.S.-Mexico Agreement (CUSMA), according to new guidance released Thursday.
What’s Happening?
Starting Saturday (May 3), a 25% tariff will hit most auto parts imported into the U.S. However, parts compliant with CUSMA—the trade deal replacing NAFTA—will dodge the hefty fees. The move aims to incentivize North American production chains, but critics warn it could raise costs for non-compliant suppliers.
Fine Print Alert ⚠️
Not all parts get a free pass. Non-U.S. components used in vehicles assembled outside the country will still face the 25% duty. This creates a tricky puzzle for global automakers balancing regional and overseas supply chains.
Cover image via VCG: A roll of sheet aluminum at a Mexico-based auto parts facility (February 2025).
