How auto suppliers can prepare for tariffs against Canada and Mexico

Automotive suppliers must plan for multiple scenarios as President-elect Donald Trump takes office with plans to implement tariffs against Canada and Mexico that will affect their supply chains, experts say.

“Nothing would have more impact than tariffs on Canada and Mexico,” said Elaine Buckberg, senior fellow at Harvard University’s Salata Institute for Climate and Sustainability, former chief economist at General Motors and a former senior U.S. Treasury official.

Trump’s tariff proposals could upend automotive supply chains because parts and materials imported from foreign producers are often used in vehicles assembled in the U.S., Canada or Mexico, with many components crossing international borders multiple times. Mexico produced an estimated 16.1% of vehicles sold in the U.S. in 2024, while Canada produced approximately 7.3%, according to Wards Intelligence and GlobalData data. Mexico also accounted for nearly 42% of U.S. auto parts imports from January to September 2024, while Canada accounted for about 10%, according to U.S. International Trade Administration data.

“In addition to a proposed 25% tariff generally on all imports from C…