The impact of US tariffs on North American auto manufacturing and implications for USMCA | 국외연구자료

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The impact of US tariffs on North American auto manufacturing and implications for USMCA

Brookings

2025.05.14

Since coming into office, President Donald Trump increased U.S. tariffs on all imports from China to 145% (only to agree with China to 115% tariff reduction for 90 days on the most recent tariffs),1 applied a global 10% tariffs to the rest of the world and a global 25% tariff on imports of autos and steel and aluminum. Additional so-called reciprocal tariffs on the rest of the world (ROW) except Canada and Mexico were announced on April 2 and then subsequently paused for 90 days. When it comes to Canada and Mexico, Trump imposed a 25% tariff on all imports from Canada and Mexico that do not comply with the United States-Mexico-Canada Agreement (USMCA) and applied a 25% tariff on autos imported under USMCA, but only on the non-US content. Significantly, Trump did not impose additional so-called reciprocal tariffs on Canada and Mexico. As a result, the majority of U.S. imports from Canada and Mexico that are USMCA compliant continue to enter the U.S. duty free.

This mix of relatively higher China tariffs compared to tariffs on many of the U.S. imports from Canada and Mexico. will have various implications for trade and investment across North America. For one, higher U.S. tariffs on China will also create a stronger incentive for China to circumvent U.S. tariffs by entering the U.S. via Mexico and Canada, and this incentive may extend to other countries that also face higher U.S. tariffs. The following outlines how Trump’s recent tariffs will affect trade and investment across North America with a particular focus on autos, and the implications for the 2026 review of the USMCA.

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