Automotive supply chains assess impact of new tariffs
Tariffs on auto imports
A new 25% U.S. tariff on car imports went into effect 3 April 2025 and is slated to go into effect on some car parts no later than 3 May 2025. This applies to both finished cars and trucks delivered into the United States, though vehicles compliant with the U.S.-Mexico-Canada Free Trade Agreement are subject to tariffs only on their foreign content. USMCA-compliant car parts will remain tariff free until the U.S. government establishes a process to apply tariffs to their non-U.S. content. For the latest updates, see our client advisories.
These new tariffs are disrupting the auto industry, as some U.S. and European automakers have already announced pauses and increases in production, layoffs and price hikes. At the same time, automakers are struggling to assess the makeup of the thousands of parts in their vehicles in order to comply with new U.S. tariffs on aluminium and steel.
Mexico export market
The Mexico auto export market had already shown recent weakness. Though March figures aren’t yet available, auto exports declined 11.5% in February. This performance was affected by an 8% decrease in automobiles delivered to the United States the first two months of the year. This indicates a softening in demand, likely influenced by a combination of economic factors and the evolving regulatory landscape.
Overall truckload capacity between Mexico and the United States remains available. However, tariff-related uncertainties and lower automotive exports may dampen demand in specific lanes as well as introduce volatility into logistics planning and demand forecasting.
Strategies for success in the automotive market
In this context, companies with less-than-truckload (LTL) freight, particularly non-standard or bulky automotive parts, can benefit from strategies like customs entry consolidation and increasing the accuracy of their freight measurement. Tools such as dimensioners that precisely measure delivery sizes are becoming increasingly valuable as automotive shippers seek to use truck space efficiently and save money.