The Auto Care Association has voiced its concern over the potential economic impact of President-elect Donald Trump’s plans to impose significant tariffs on key U.S. trading partners, including Canada.
Trump recently announced his intention to implement a 25 per cent tariff on imports from Canada and Mexico and an additional 10 per cent tariff on goods from China starting Jan. 20, 2025. Trump described the measures as a strategy to combat illegal immigration and drug trafficking coming from both Canada and Mexico.
Trump has also warned of a potential 100 per cent tariff on imports from BRICS nations — Brazil, Russia, India, China, South Africa and other affiliated countries — if it moves forward with a new currency that could challenge the U.S. dollar.
The Auto Care Association pointed out that some industry experts have warned that these tariffs could lead to higher prices for consumers and significant disruptions for businesses. Trade associations have expressed concerns that additional costs would likely be passed down the supply chain, ultimately hitting consumers.
The association, which represents the U.S. automotive aftermarket industry, has previously highlighted the negative effects of tariffs. The group says higher import costs would make vehicle repairs more expensive, potentially delaying necessary maintenance and increasing risks on the road.
Small and medium-sized businesses, already facing economic pressures, could experience cash flow challenges and reduced capacity due to upfront tariff costs, the association cautioned.
Canada and Mexico: key trading partners
Auto Care underscored Canada and Mexico as critical trading partners for the U.S. auto sector, accounting for 58 per cent of auto parts imports and 76 per cent of exports in 2023. These trade relationships, governed by the United States-Mexico-Canada Agreement (USMCA), support a highly integrated supply chain, with many components cross borders multiple times during production, reducing costs for manufacturers and consumers.
Top imports from Canada and Mexico include essential components like spark-ignition engines, gearboxes, brake systems and catalytic converters. These parts are vital to the maintenance and repair of vehicles in the United States.
Top product categories imported from Canada include certain spark-ignition reciprocating piston engines, gearbox parts, suspension system parts and clutch parts.
As the association points out, a catalytic converter — which currently costs several hundred to several thousand dollars — could see prices spike with a 25 per cent tariff on imports from Canada and Mexico.
Broader implications
Recent trends suggest that many Americans are already delaying vehicle maintenance due to rising costs, the association said. According to the 2025 Auto Care Factbook, the proportion of vehicle owners postponing repairs increased from 21.6 per cent in 2021 to 25.1 per cent in 2023. Industry analysts predict that higher tariffs could exacerbate this trend, leading to more unsafe vehicles on the road.
The group believes questions remain about how proposed trade measures will balance economic priorities with the goal of reducing costs for American consumers. For the auto industry, the stakes are high, with trade policy decisions likely to ripple across supply chains and consumer markets.
Canadian imports of auto parts (2023):
Canadian exports of auto parts (2023):
Image credit: Depositphotos.com
The post How Trump’s proposed tariffs could affect the industry appeared first on Auto Service World.
