The week of March 3 has been full of anticipation and rapid changes to trade policy, largely impacting the state’s automotive industry. See below for a look at where negotiations currently stand and how changes to proposed tariffs on trade between the U.S. and Canada and Mexico have unfolded.
The Latest: Automotive Tariff Timeline
March 7, 2025
THE LATEST
March 6, 2025
What Happened: President Donald Trump signed an executive order pausing the previously imposed 25% tariff on automotive imports from Canada and Mexico that are United States-Mexico-Canada Agreement (USMCA)-compliant until April 2, 2025.
What It Means: The decision aims to protect American car manufacturers and farmers from potential economic harm. The pause follows discussions with Mexican President Claudia Sheinbaum and Canadian officials, reflecting ongoing diplomatic negotiations. It will allow further evaluation of the tariffs’ impact on the USMCA, ensuring that trade relations remain compliant with existing agreements.
MichAuto Perspective
“While this Executive Order pausing tariffs on automotive imports from Canada and Mexico is encouraging, a great deal of uncertainty remains as the industry must continue grappling with what comes next as the month-long reprieve ticks down. Between now and April 2, MichAuto will continue to advocate for a path forward that provides greater certainty for this industry that has experienced costly and debilitating disruptions since these proposed tariffs were first announced.
To ensure Michigan’s economic viability and resume the productive operation of its signature industry, expediting a clear path back to normal trade relations with our North American partners is imperative. To this end, MichAuto supports beginning USMCA renegotiations, currently scheduled for 2026, this year.
The sooner trade representatives from the U.S., Mexico, and Canada can begin this process, the sooner normal trade relations in North America can be restored, and with it, the certainty Michigan’s automotive industry requires to sustain and grow.”
Glenn Stevens Jr., Executive Director, MichAuto; Vice President, Automotive and Mobility Initiatives, Detroit Regional Chamber
LOOKING BACK
March 3, 2025
What Happened: President Donald Trump confirmed that the previously delayed 25% tariffs on Canada and Mexico would move forward as planned, with an effective date of March 4.
What It Means: In 2023, Michigan imported $46 billion in goods from Canada and $69 billion from Mexico, with a significant portion of this trade tied to the automotive industry. Enacting the 25% tariff on these goods will now cause substantial price increases for both consumers and businesses, negatively impacting Michigan’s signature industry and the thousands of companies and more than one million workers that are a part of it.
Beyond the immediate cost burdens, these tariffs expose Michigan to significant economic risk. With 43% of Michigan’s total exports going to Canada and another 23% to Mexico, our state is particularly vulnerable to retaliatory tariffs, which will have a devastating effect on Michigan’s manufacturing sector and broader economy.
MichAuto Perspective
“Not only will the enactment of 25% tariffs on Canada and Mexico threaten Michigan’s business climate and its signature automotive and mobility industry, but it also represents bad-faith trade policy. Unilaterally imposing tariffs before United States-Mexico-Canada Agreement (USMCA) renegotiations even begin will undermine diplomatic processes and risk damaging Michigan’s relationships with its closest trading partners.
As MichAuto has continued to advise, the tariffs’ harmful effects will extend beyond trade relationships and will cause businesses to purchase and produce fewer products, hire fewer employees, and increase prices to the detriment of consumers. Michigan’s economic viability and business attractiveness will be reduced to collateral damage.
MichAuto urges the administration and policymakers to prioritize constructive engagement over punitive measures that ultimately hurt state and nationwide businesses and consumers. ”
Glenn Stevens Jr., Executive Director, MichAuto; Vice President, Automotive and Mobility Initiatives, Detroit Regional Chamber
March 5, 2025
What Happened: The White House announced another one-month delay for 25% tariffs on automotive-related trade between the U.S. and Canada and Mexico.
What It Means: While the announcement of a pause on tariffs applied to automotive imports from Canada and Mexico is encouraging, a great deal of uncertainty remains as the industry struggles to interpret just what the pause means. Per the White House’s statement, there is hope that the tariff pause applies to all companies that are United States-Mexico-Canada Agreement (USMCA) compliant. At this time, there has been no clarification as to whether this pause applies across the whole sector or just for American OEMs.
This confusion compounds the uncertainty already debilitating the industry, and for suppliers, in particular, it will continue to cause costly disruptions until greater clarity is provided.
MichAuto Perspective
“While the postponement of the White House’s proposed tariffs on automotive-related trade between the U.S. and Canada and Mexico is somewhat of a reprieve for the industry, damage has already been done. For an industry that operates in three-to-five-year product cycles, this level of day-to-day uncertainty is debilitating.
MichAuto will advocate for all of the proposed tariffs, across industries, to be rolled back in the interest of the state and nation’s economic prosperity. With Michigan’s global automotive and economic competitiveness on the line, lifting these tariffs is the necessary path forward.”
Glenn Stevens Jr., Executive Director, MichAuto; Vice President, Automotive and Mobility Initiatives, Detroit Regional Chamber