The Trump administration has officially imposed a sweeping 25% tariff on all imported vehicles, including those from Canada and Mexico, marking a seismic shift in North America’s auto landscape. The move ends key exemptions under the United States–Mexico–Canada Agreement (USMCA), sparking immediate consequences for automakers, suppliers, workers, and consumers alike.
On April 24, 2025, President Donald Trump announced the full implementation of a 25% tariff on imported cars and trucks, aimed at boosting U.S. vehicle manufacturing and protecting domestic jobs. The new tariffs include countries that were previously exempt under trade agreements — most notably Canada and Mexico, who are deeply embedded in the U.S. auto supply chain.
Stellantis, the parent company of brands like Jeep, Dodge, Chrysler, and Ram, has temporarily shuttered key manufacturing plants in both Canada and Mexico. These disruptions have already forced over 900 American workers into layoffs, with more cuts expected across the border due to reduced parts flow and production halts.
For everyday drivers and car buyers, the fallout could hit the wallet hard. Analysts estimate that vehicle prices in the U.S. could jump by $3,000 to $10,000 due to the tariffs. Whether you’re looking at a new SUV, pickup truck, or EV, expect higher sticker prices and longer wait times for delivery.
Meanwhile, many consumers are rushing to dealerships in hopes of locking in lower prices before inventory affected by tariffs begins to dominate lots.
Automakers like Ford, General Motors, Toyota, Honda, and Nissan are scrambling to reassess their production strategies, with some planning to shift more manufacturing into the U.S. to dodge the tariffs. However, such changes take time — and many companies warn that job cuts and price hikes are unavoidable in the short term.
Even U.S.-based manufacturers are affected, since many of their parts are sourced from Mexico and Canada. That includes everything from transmissions and engines to wiring harnesses and safety systems.
Supporters of the policy argue that these tariffs will reinvigorate American manufacturing and reduce dependency on foreign labor. Critics, however, say the decision risks a trade war with close allies and could damage the very workforce it aims to protect.
Canada and Mexico are both reviewing retaliatory tariffs and have called for urgent renegotiations of trade terms. Industry insiders warn this could spiral into a multi-year economic tug-of-war.
The U.S. auto industry is bracing for a major shakeup. Whether you’re a car buyer, an employee in the sector, or a business that relies on vehicles, now’s the time to pay close attention.
Stay tuned as automakers, politicians, and trade experts battle over the future of the North American auto industry — and your next car could cost a lot more because of it.