President Trump’s 25% tariff on new cars has been in place for a matter of hours, and already, the automotive industry has started making radical changes.
Plant Closures Begin
CNBC reports that Stellantis, parent company of Chrysler, Dodge, Jeep, Ram, and other brands, “is pausing production at two assembly plants in Canada and Mexico as the company attempts to navigate President Donald Trump’s new round of 25% automotive tariffs, the company confirmed Thursday.”
The Detroit Free Press notes, “The pause will lead to temporary layoffs at the Warren and Sterling stamping plants in Michigan as well as the Indiana and Kokomo transmission plants and Kokomo Casting in Indiana, according to a company spokeswoman.”
Canada Retaliates
CNN reports, “Canadian Prime Minister Mark Carney said that Canada will levy a 25% counter-tariff on vehicles imported from the United States that are not compliant with the United States-Mexico-Canada Agreement (USMCA) in response to U.S. tariffs on Canadian vehicles and auto parts that went into effect today.”
The levies, Carney said, will “not affect vehicle content from Mexico.”
Shipments Halted
Volkswagen “has halted rail shipments of vehicles built in Mexico to the U.S.,” reports industry publication Automotive News.
Like all automakers, Volkswagen already has a supply of new cars on dealer lots, imported before tariffs began. Kelley Blue Book parent company Cox Automotive estimates that the company ended February with 86 days’ worth of new cars to sell. However, inventory is a fluctuating target.
Sales are speeding up as Americans rush to snap up the cars still offered at pre-tariff prices.
Window Stickers Changing
Volkswagen will add the tariff to the window sticker of every new car, according to Automotive News. The company has not confirmed the report.
An entry labeled “import fee” will reportedly itemize the tariffs’ cost.
“Employee Pricing” Returns
Ford will use the tariffs as an opportunity to resurrect a long-gone advertising offer – employee pricing.
The Detroit Free Press explains, “Ford will offer its employee-pricing plan, known as the A Plan, to consumers on most of Ford 2024 and 2025 model year vehicles through June 2.”
Ford hasn’t published final prices under the plan. It applies to the Mustang, Escape, Bronco, Bronco Sport, F-150, F-150 Lightning, Mustang Mach-E, Maverick, Ranger, Transit, E-Transit, Lincoln Corsair, and Nautilus; the 2024 Ford Super Duty (pickup models only), Expedition and Lincoln Navigator only; and new 2025 Ford Explorer and Lincoln Aviator.
The offer excludes Raptor models, Mustang Dark Horse models, and “specialty Mustang and Bronco vehicles,” likely including the new Stroppe edition.
Mercedes May End Imports of Inexpensive Models
Citing “people familiar with the matter,” Automotive News reports that Mercedes “is considering withdrawing its least expensive cars from the U.S. because President Donald Trump’s auto tariffs would likely make their sales economically unfeasible.”
In a statement, the company said the report is “without any merit.”