The United States-Mexico-Canada Agreement (USMCA) has served as a cornerstone of President Trump’s first term and has quickly become a dominant feature of North American trade policy, fostering economic growth, stabilizing supply chains, and strengthening the U.S. auto industry. However, the recently proposed 25% tariff on auto imports—including those from Canada and Mexico—threatens to undermine these gains. While the Trump Administration has temporarily exempted USMCA-compliant goods from the tariff, the uncertainty surrounding long-
term trade policy poses serious risks to the U.S. auto sector.

The U.S. auto industry, the nation’s largest manufacturing sector, contributes approximately $730 billion to GDP, and plays a vital role in job creation and exports. Integrated North American supply chains, strengthened by USMCA, enhance efficiency, cost competitiveness, and long-term investment planning. Imposing a 25% tariff without a permanent USMCA exemption would severely disrupt this ecosystem—raising consumer costs, reducing demand, and weakening purchasing power. It would also create supply chain disruptions leading to significant investment
losses and inefficient production shifts, erode industry competitiveness, and trigger broader economic ripple effects across the U.S. economy.