April 9: A 90-Day Tariff Pause

On Wednesday, President Donald Trump announced a 90-day pause on tariffs for most U.S. trading partners. The universal 10% tariff on all imported goods is still in effect. 

However, the pause does not apply to China, which is now facing tariffs of 125%. China has announced it will be raising tariffs on U.S. good by 84%. 

In response to U.S. tariffs on Canadian goods, Canada announced countermeasures, including a 25% tariff on non-USMCA compliant vehicles imported from the United States, effective April 9, 2025.

In 2024, U.S. imports of automotive vehicles, parts, and engines reached a record $474.3 billion, the highest on record, according to U.S. Census Bureau data.

April 7: Retaliatory Tariffs on U.S. 

On April 4, China announced a 34% retaliatory tariff on U.S. goods, set to take effect April 10, in direct response to escalating trade measures by the United States. Just days later, on April 7, Trump threatened to raise tariffs on Chinese imports by an additional 50% if Beijing does not reverse its latest move by April 8.

The rapid back-and-forth signals a renewed intensification of U.S.–China trade tensions, with both sides showing little willingness to de-escalate.

​In response to the recent 25% tariffs imposed by the U.S. on imported vehicles and auto parts, General Motors, Ford, and Stellantis have made several moves in order to mitigate the impact on operations and consumers:​

• Production Adjustments: GM is increasing production at its Fort Wayne, Indiana plant, particularly for light-duty trucks, with plans to hire temporary employees.

• Employee Pricing Incentive: Ford launched the "From America, For America" program, offering employee pricing to all customers on most models through June 2, 2025.

• Production Pauses and Layoffs: Stellantis temporarily halted production at plants in Canada and Mexico, announcing the temporary layoff of approximately 900 U.S. workers.​

• Employee Pricing Promotion: Following Ford's lead, Stellantis extended its employee-discount pricing to the general public on select 2024 models, including popular Jeep, Ram, and Dodge vehicles, in hopes of bolstering sales. ​

April 2: New Tariffs Imposed

On Wednesday, President Trump unveiled a broad tariff policy that would impose a 10% baseline tariff on all imported goods, with higher rates targeted at specific countries. The 25% on all cars shipped to America from other countries went into effect as well. 

The president also announced an individualized reciprocal higher tariff on countries "with which the United States has the largest trade deficits" with plans for this to take effect April 9. 

The order also gives Trump the authority to raise tariffs if other countries retaliate, or lower them if those countries take meaningful steps to address trade imbalances and cooperate with the U.S. on economic and national security issues.

The Budget Lab at Yale modeled the total effect of the 25% automobile tariffs releasing a report that showed the tariffs are projected to raise average motor vehicle prices by approximately 13.5%, equating to an additional $6,400 for a typical new car. Imported models may experience price increases of up to 31%. ​

March 26: Tariffs Ahead

In an anticipated move, Trump signed a proclamation imposing a 25% tariff on imported cars and certain auto parts, citing national security concerns. The tariffs are set to take effect on April 2, which Trump called "Liberation Day."

The action, invoking Section 232 of the Trade Expansion Act of 1962, applies to passenger vehicles (sedans, SUVs, crossovers, minivans, and cargo vans), light trucks, and key components including engines, transmissions,  powertrain parts, and electrical systems with the possibility of tariffs expanding on additional parts. 

Domestic Manufacturing, Procurement Cycles

For the time being, parts that meet U.S.-Mexico-Canada Agreement standards will remain exempt, pending further review by the Department of Commerce and U.S. Customs and Border Protection.

The administration stated that these measures will bolster domestic manufacturing and address trade imbalances.

"We were losing all of our plants, " Trump said during Wednesday's announcement on the tariffs. "They were being built in Mexico and Canada and other places. Now those plants largely have stopped, and they're moving them to our country."

However, industry analysts have warned the tariffs could upend the automotive marketing leading to increased vehicle prices and potential disruptions in the automotive supply chain.

With many government fleets operating on multi-year procurement cycles, this sudden increase in vehicle and parts costs may require adjustments to FY2025 budgets or renegotiation of contracts signed before the tariff was announced.

Developments Preceding the April 2 Tariffs

In February, President Trump announced his intention to impose a 25% tariff on imported vehicles and key auto parts coming from Mexico and Canada. However, following discussions with the Big Three in March, the president agreed to delay the tariffs on certain vehicles built in North America.

The automakers reportedly pushed for waivers on some components essential to their supply chains, arguing that a blanket tariff could disrupt domestic production and increase costs for U.S.-built vehicles that rely on globally sourced parts.