President Donald Trump's proposed tariffs on goods from Mexico and Canada are expected to disproportionately impact automotive suppliers compared to automakers. While most vehicles produced in North America meet USMCA free trade requirements, a smaller percentage of individual parts comply with these stringent standards.
In 2024, approximately 63% of motor vehicle parts imported from Mexico into the United States were USMCA compliant, a decrease from 75% in 2019. For Canada, 74.6% of parts were tariff-free under USMCA in 2024, down from 83.1% in 2019.
Auto suppliers have stated they cannot absorb the 25% increased costs on non-compliant USMCA parts, which could lead to production disruptions if smaller suppliers are forced to close. Aptiv is noted as having stock performance that is 'roughly flat' amid these tariff discussions, in contrast to some larger publicly traded suppliers that are down double digits.
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