It’s official. On March 26, President Donald J. Trump signed a proclamation from the Oval Office that will apply sweeping 25% tariffs on critical bits of the automotive industry.
Beginning at 12:01 a.m. on April 3, 25% tariffs will be applied to all cars imported from other countries.
In addition, the text of the proclamation states that tariffs will also apply to “key automobile parts” like engines, transmissions, and electrical components. These tariffs on car parts are set to take effect “no later than May 3,” but the Administration states that USMCA-compliant parts will remain tariff-free until officials can determine their non-US content accordingly.
However, data from S&P Global Mobility shows that about half of the nearly 16 million vehicles sold in the United States in 2024 were imported, with most coming from five countries: Canada, Mexico, South Korea, Japan, and Germany.
From his seat at the Oval Office, Trump told reporters that the policy would incentivize foreign and domestic automakers to build more of their vehicles in the U.S.
“And what that means is a lot of foreign car companies, a lot of companies, are going to be in great shape because they’ve already built their plant, but their plants are underutilized, so they’re able to expand them inexpensively, and quickly,” Trump said. “But others will come into our country and build, and they’re already looking for sites.”
2025 Kia EV9 SUV at Kia Georgia in West Point, Georgia
Kia
These “foreign” cars are [technically] the most ‘American-made’
In light of this development, it would be safe to assume that cars made by Detroit’s Big Three; Ford (F) , General Motors (GM) and Stellantis (STLA) would be building the most American-made vehicles on the road.
However, a closer look at the findings from the U.S. government tells a much different story.
In 1994, Congress passed the American Automobile Labeling Act (AALA), which requires automakers to disclose the percentage “information about the value of the U.S./Canadian and foreign parts content of each vehicle,” as well as “the countries of origin of the engine and transmission, and the site of the vehicle’s final assembly” to discerning customers on a visible part of the car; usually on a corner of the window sticker.
The National Highway Traffic Safety Administration (NHTSA) is the agency responsible for receiving and recording such information from automakers for consumers and has such documents readily available on its website.
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According to the latest AALA report by the NHTSA for the 2025 model year, the car with the largest US/Canada parts content is the Kia EV6, with 80 percent of its parts coming from US/Canada and 15% from South Korea.
It’s important to note that parts content and origin vary across models and even different trim levels or powertrains of certain vehicles, as certain models could contain some “foreign-made” parts.
This is the case in the “second-place” spot, as the top-of-the-line Honda Ridgeline AWD Trailsport and the all-wheel drive and rear-wheel driver versions of the Tesla Model 3 Long Range claim the space. All three vehicles mentioned boast 75% US/Canada parts content; however, Tesla disclosed that 25% of its Model 3 Long Range parts came from Mexico.
Multiple Honda, Acura and Tesla vehicles claim the third spot. The Acura MDX (FWD and AWD), Honda Odyssey, Passport, Pilot (FWD and AWD, all trims), and Ridgeline (AWD), as well as Tesla’s Model 3 Performance and Model Y (all trims) all claim to have 70% US/Canada parts content.
However, Tesla states that its Model 3 and Y Performance contain 20% Mexican parts content, while both the Y Long Range in rear and all-wheel-drive have 25%.
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Automakers may be on the hook for inaccurate reporting
While these sticker number contents are reported to the NHTSA, the Trump administration is leaving the responsibility to enforce the tariff on vehicles at the border to U.S. Customs and Border Protection (CBP)
According to the text in clause 3 of the proclamation, if CBP finds that the declared value of non-U.S. content in a car about USMCA-compliant is inaccurate “due to an overstatement of U.S. content,” automakers are on the hook for a 25% tariff” on the full value of the automobile, “regardless of the actual U.S. content of the automobile.”
At the Oval Office, Trump mentioned that there would be “strong policing” in this regard.
“For the most part, I think this will lead to cars being made in one location. Right now, a car would be made here, sent to Canada, sent to Mexico, sent all over the place—it’s ridiculous,” he said. “So, this is a straightforward system.”
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