The same day Canadian Black Book said the Detroit Three, along with several parts suppliers and dealer associations across the U.S., wrote a letter to the Trump administration urging it to repeal its global auto tariffs, Trump signed an executive order to reduce the tariff level on vehicle imports.
The softening of the auto tariffs is meant to alleviate the separate levies that resulted in tariff stacking. For example, the additional 25 per cent tariffs on steel and aluminum. CBC said Trump agreed to provide carmakers with credits “for up to 15 per cent of the value of vehicles assembled domestically.”
The 25 per cent auto tariff on imported vehicles still remains, and those vehicles not assembled in the U.S. must still deal with a 25 per cent import duty. However, this tariff easing from the Trump administration does away with tariff stacking, with the exception of China. And based on an IDTechEX report, the so-called tariff credit “can amount to 3.75 per cent of a vehicle’s retail price, with a formula calculating the total tariff relief.
However, some industry players such as Candace Laing, President of the Canadian Chamber of Commerce, have voiced concerns that the “tariff fix” fell short of what auto companies “in the deeply integrated North American industry” really needed, according to CBC. Lack of stability has also been called out, in that the tariff situation/expectations of what’s to come remains unstable or inconsistent.
In a similar frame, CNN Business said “Trump stressed that the executive order provides only a temporary break to auto companies, allowing them more time to re-shore their manufacturing capabilities.” Some OEMs will shift production away from the U.S. as a result of the tariffs, regardless of Trump’s latest move.
“[Subaru has] announced a plan to shift production of Canadian destined units away from the U.S., said Subaru Canada CEO, Tomohiro Kubota. The company sold one quarter of its vehicles in 2024 from U.S. production facilities,” according to CBB. Media reports suggest the automaker will shift production back to Japan, rather than have the vehicles built in Indiana.
