Trump Tariffs on Mexico, Canada, China, BRICS Imports Could Strain Over $100 Billion Automotive Parts Industry

The proposed tariffs on imports could lead to significant price increases for American consumers already feeling the sting of inflation.

BETHESDA, Md. – December 11, 2024 – President-elect Trump posted on his Truth Social account earlier this month (here and here) that on Jan. 20, 2025, he plans on imposing a 25% tariff on imports from Mexico and Canada and an additional 10% tariff on imports from China. The proposed measures are aimed at addressing illegal immigration and drug trafficking.

In a subsequent message, President-elect Trump warned he would impose a 100% tariff on imports from BRICS countries – Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates – if they establish a new BRICS currency or back any currency that could challenge the U.S. dollar’s dominance.

Impacts on Businesses and Consumers
The Auto Care Association recognizes the importance of addressing these issues but warns of the significant impact tariffs would have on U.S. consumers and the auto care industry. Tariffs of this magnitude on America’s largest trading partners could dramatically raise prices for U.S. consumers and U.S. businesses.

The Auto Care Association, representing the more than $500 billion automotive aftermarket industry in the United States, has previously testified before the Office of the U.S. Trade Representative (USTR) of the negative effects tariffs have on the automotive aftermarket industry. Tariffs are not paid for by our trading partners; instead, they are passed down the supply chain and are a financial burden on families trying access affordable parts to repair and maintain their vehicles. Delays in vehicle repairs and maintenance pose a safety risk for drivers, passengers and pedestrians.

Additionally, tariffs are a significant financial strain on businesses that must pay the tariff costs upfront, tying up resources and capital that would otherwise be used for other investments and growing the business. For small and medium-sized businesses, this could result in cash flow challenges, delayed payments, reduced capacity and inventory, causing businesses to scale back the operations.

Trade with Mexico and Canada
Mexico and Canada are the American auto care industry’s largest and most critical trading partners, accounting for 58% of auto parts imports and 76% auto parts exports in 2023.

Source: 2025 Auto Care Factbook, U.S. Trade Data by Country, NAICS 3363, pg. 152

The United States’ trade relationship with Mexico and Canada supports mutually beneficial supply chains to ensure affordable parts are available to manufacturers, repair shops and consumers. The renegotiated United States-Mexico-Canada-Agreement (USMCA) fosters beneficial trade, reduce barriers and economic growth between the three countries. Supply chains between the U.S., Mexico and Canada are highly integrated with components often crossing the border multiple times during production before it reaches the end user.

According to a Congressional Research Service report, “a significant portion of merchandise trade between the United States and Mexico occurs in the context of production sharing, as manufacturers in each country work together to create goods. The flow of intermediate inputs produced in the United States and exported to Mexico and the return flow of finished products greatly increased the importance of the U.S.-Mexico border region as a production site.”

Top Product Categories Imported from Mexico include certain:

• Ignition wire sets
• Seat parts
• Brake systems and components
• Gearboxes
• Catalytic converters
• Suspension shock absorbers and parts
• Spark-Ignition Reciprocating Piston Engines
• Automotive air conditioning parts

Top Product Categories Imported from Canada include certain:

• Spark-Ignition Reciprocating Piston Engines
• Gearbox parts
• Suspension system parts
• Clutch parts

With the average price for catalytic converters currently ranging from several hundred to several thousand dollars in the United States, an American vehicle owner in need of a catalytic converter replacement could see that cost jump with a 25% tariff on parts from Mexico and Canada being passed on to the customer.

Additional Automotive Aftermarket Industry Trade Data

U.S. Automotive Parts Import Markets, 2023, NAICS 3363 (USD in millions)

U.S. Automotive Parts Export Markets, 2023, NAICS 3363 (USD in millions)

The Cost of Tariffed Automotive Parts, Beyond the Price Tag
In recent years, delayed vehicle maintenance has increased among American vehicle owners, with the proportion of consumers who delayed any service or repair of their vehicles growing from 21.6% in 2021 to 25.1% in 2023 (2025 Auto Care Factbook). Among the various reasons for delaying vehicle maintenance and repair, cost of repair remained the primary driver for the postponement of service or repair.

A potential 25% to 100% cost increase for replacement automotive parts is likely to drive the price of vehicle maintenance and repair up for consumers even further. This would result in even more vehicles in operation on American roadways that are past due for service and in need of repair. With the sting of inflation still being felt by many Americans, the Auto Care Association supports the incoming Trump administration’s goal of achieving fair trade and we strongly encourage the incoming Trump administration to pursue trade measures that will help to lower everyday costs for Americans.

The Auto Care Association is committed to monitoring these developments closely and will keep members informed about potential impacts.

Learn more about the Auto Care Association’s government affairs and trade initiatives at autocare.org/government-relations.

For more automotive aftermarket industry data, including the latest import and export figures, contact communications@autocare.org.