President Trump has declared plans for new tariffs on Canada and Mexico, including a hefty 25% on auto imports. This move comes at a critical time for the industry, which could face severe disruptions.

Since 1965, free trade agreements have eased the flow of vehicles within North America. Trump's tariffs threaten to disrupt this seamless trade established over decades, impacting automakers heavily invested in cross-border production.

The proposed tariffs would apply a 25% duty on Canadian and Mexican auto imports. Set to start in 2025, these tariffs may significantly increase costs for components and completed vehicles.

With the looming tariffs, industry leaders warn of severe supply chain disruptions and cost hikes. Critics argue that such tariffs pose risks to U.S. manufacturing by raising prices and stressing international relations.

The tariffs could skyrocket car prices, adding around $3,000 per vehicle. Consumers might feel the pinch, leading to decreased purchases and ripples through the entire economy, affecting employment and growth.

While some back the tariffs for addressing unrelated political issues, others see them as harmful. Critics fear they could provoke retaliatory trade measures from Canada and Mexico, aggravating economic tensions.

The tariffs might drive renegotiations under USMCA, influencing future trade dynamics. Auto companies must navigate this shift, potentially seeking local sourcing to minimize impacts, while trade conflicts loom.