New Tariffs’ Impact on the Automotive Industry

Actalent Expert and Client Success Executive Dolan Schroyer

The U.S. imposed a 25% tariff on auto parts from Canada and Mexico, disrupting supply chains. Actalent’s flexible engineering services and talent solutions offer a strategic advantage.

On March 4th, the United States imposed a new 25 percent tariff on automotive parts imported from Canada and Mexico. However, products that comply with the United States-Mexico-Canada Agreement (USMCA) were exempted until April 2nd, offering brief relief for some manufacturers.

The automotive industry is now grappling with significant challenges due to these new tariffs. The changes are expected to disrupt supply chains, increase costs and create uncertainty for both manufacturers and suppliers. Automotive part makers must now account for tariffs costs on a daily basis due to the rapid implementation of these measures. This urgency, combined with the evolving trade landscape, is causing increasing concern among automakers and suppliers.

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Staying Ahead of New Tariff Challenges with Actalent

Automotive companies are investing in marketing analytics to stay ahead of market trends and avoid reactive measures. However, managing these investments in-house can be challenging. Actalent’s flexible engineering services and talent solutions offer a strategic advantage.

Alleviating Workload Burden

To ease the increased workload for automotive companies, Actalent offers services that allow for quick scaling of operations based on demand and developments. This ensures agility in these uncertain times. We act as strategic advisor, providing in-depth market insights and role-specific compensation data to help clients make informed decisions and remain competitive in the evolving trade landscape.

Immediate Access to Expertise

With over 150 global locations, including the U.S., Canada, Europe and India, Actalent can source engineering talent to fit organizational needs, regardless of location. Our customized engineering services and talent solutions position clients for success, whether specific expertise, project management or just a few experts to execute tasks are needed.

Specialized Skill Sets

Actalent’s specialized recruiters ensure that clients receive the best talent for their needs. The range of skill sets includes automation engineers, quality engineers, purchasing/buyers, manufacturing engineers, production engineers, project managers, software engineers and developers. These experts are seasoned in handling various aspects of automotive engineering and production.

Supported Capabilities

A wide array of engineering capabilities is supported by Actalent, such as controls and automation engineering, electrical systems development, embedded systems development, mechanical systems development, product support, systems engineering, tools and equipment engineering, value engineering, regulatory compliance, and verification and validation. These capabilities enable automotive companies to address technical challenges arising from new tariffs effectively.

Maintaining a Competitive Edge Despite Tariffs

The recent imposition of the 25 percent tariff on automotive parts imported from Canada and Mexico has introduced significant challenges for the automotive industry. These tariffs are disrupting supply chains, increasing operational costs and creating a climate of uncertainty for manufacturers and suppliers. As companies strive to adapt to these changes, strategic solutions become essential.

Actalent’s engineering services and talent solutions offer a vital resource for automotive companies facing these new hurdles. By providing flexible and scalable support, Actalent helps clients manage the increased workload and navigate the complexities of the evolving trade environment. With specialized expertise and a wide array of engineering capabilities, Actalent ensures that automotive companies can maintain their competitive edge and continue to thrive despite the challenges posed by the new tariffs.

Frequently Asked Questions

What is the strategy behind tariff implementation?

Tariff implementation is a strategic tool used by governments to regulate international trade, protect domestic industries, generate revenue and adjust trade balances. By imposing taxes on imported goods, tariffs can make foreign products more expensive, thereby encouraging consumers to buy locally produced items. This helps local businesses compete against international competitors and can also be used as leverage in trade negotiations.

How have tariffs impacted automotive sale/pricing in Q1 of 2025?

In Q1 of 2025, new tariffs of 25 percent on imported automotive parts led to a surge in new-vehicle sales as consumers rushed to buy before prices increased. This surge is expected to be temporary, with a tighter inventory of cheaper vehicles driving up prices significantly. The automotive industry faces uncertainty regarding the duration of tariffs, potential limitations on imports and how brands will manage the additional costs. Used-vehicle prices are also likely to rise, and automakers will need to adjust pricing and incentives to stay competitive with rivals that have lower tariff burdens.

What automotive parts will be most impacted by tariffs?

The non-exhaustive list of automotive parts that still demonstrates the wide-ranging and deep impacts by tariffs across the industry, include: fuel-injection pumps for compression-ignition engines, transmission shafts, catalytic converters/particulate filters, turbochargers/superchargers, lithium-ion batteries, spark plugs, suspension systems components/shock absorbers, new tires, rearview mirrors, lighting equipment, signal flashers, airbags, seat belts, bumpers and seats.