Most Mexican Auto Parts Free of Tariffs

Tariffs imposed by the Donald J. Trump administration on auto parts imports went into effect over the weekend with a broad exception for components produced in Mexico and Canada that meet USMCA requirements, although it is unclear for how long.

Beginning May 3, a 25% levy began to be applied to a list of parts produced outside North America, from engines and transmissions, to suspensions, steering parts and safety components, to infotainment modules and heating/air conditioning assemblies.

If the part does not appear on the list, it still pays a 10% tariff as stipulated last month when the President suspended the so-called “reciprocal tariffs” for 90 days.

On April 29, the White House issued a series of measures aimed at reducing the impact on the cost of cars assembled in the United States. These measures specify that parts produced in Mexico and Canada that comply with the minimum regional content will be exempt from duties.

The U.S. government's own estimates indicate that by 2023, four out of every five imported auto parts met the USMCA requirements. However, it is unclear how long this exemption will remain in place.