USMCA tariff shock: automakers face 19% import hit
Automakers in Canada and Mexico face 19% USMCA tariffs
USMCA tariff shock: automakers face 19% import hit
Automakers in Canada and Mexico face 19% import tariffs under USMCA as weak supply-chain tracing fails content rules, defaulting vehicles to penalty rates.
2025-11-03T04:11:43+03:00
2025-11-03T04:11:43+03:00
2025-11-03T04:11:43+03:00
Automakers assembling vehicles in Canada and Mexico have been hit with unexpected losses. According to T.D. Cowen and the U.S. International Trade Commission, the average duty on imports of those cars reached 19% in July. The reason is a lack of verified U.S. content in the vehicles’ build.Under USMCA rules, at least 75% of a vehicle’s components must be made in North America, and 70% of the steel and aluminum must be locally sourced. In addition, 40% of a car’s value has to come from plants paying at least $16 an hour. More and more, manufacturers are unable to document that they meet those thresholds.Experts say many companies, including GM, Ford, Stellantis and BMW, are struggling to track complex supply chains. A mistake or incomplete paperwork triggers a default 25% tariff on the entire vehicle, even if most parts are made in the region.That is how the average rate has climbed to 19%, with automakers effectively paying for not knowing exactly what goes into their own cars. Analysts add that the intricacy of component accounting is turning USMCA’s rules into a latent risk baked into the system.The new tariffs expose the costly flip side of globalization. In the hunt for cheaper production, brands let visibility into parts’ origins slip. Now that opacity carries a price—literally. It looks less like a paperwork hiccup and more like a structural blind spot of modern manufacturing.
USMCA tariffs, 19% import duties, automakers, Canada, Mexico, supply chain tracing, content rules compliance, North American content, steel and aluminum, GM, Ford, Stellantis, BMW
2025
Michael Powers
news
Automakers in Canada and Mexico face 19% USMCA tariffs
Automakers in Canada and Mexico face 19% import tariffs under USMCA as weak supply-chain tracing fails content rules, defaulting vehicles to penalty rates.
Michael Powers, Editor
Automakers assembling vehicles in Canada and Mexico have been hit with unexpected losses. According to T.D. Cowen and the U.S. International Trade Commission, the average duty on imports of those cars reached 19% in July. The reason is a lack of verified U.S. content in the vehicles’ build.
Under USMCA rules, at least 75% of a vehicle’s components must be made in North America, and 70% of the steel and aluminum must be locally sourced. In addition, 40% of a car’s value has to come from plants paying at least $16 an hour. More and more, manufacturers are unable to document that they meet those thresholds.
Experts say many companies, including GM, Ford, Stellantis and BMW, are struggling to track complex supply chains. A mistake or incomplete paperwork triggers a default 25% tariff on the entire vehicle, even if most parts are made in the region.
That is how the average rate has climbed to 19%, with automakers effectively paying for not knowing exactly what goes into their own cars. Analysts add that the intricacy of component accounting is turning USMCA’s rules into a latent risk baked into the system.
The new tariffs expose the costly flip side of globalization. In the hunt for cheaper production, brands let visibility into parts’ origins slip. Now that opacity carries a price—literally. It looks less like a paperwork hiccup and more like a structural blind spot of modern manufacturing.
