President Trump’s 25 percent tariffs on goods from Canada and Mexico could be felt particularly acutely by automakers — and car buyers — because of the number of vehicles and parts that come into the United States every day as they head to market.
Over the last three decades, since the North American free trade zone was created in 1994, automakers have built supply chains that cross the borders.
U.S. car imports by country since 1989
Manufacturers achieve economies of scale by building engine and transmission plants that are large enough to supply a number of vehicle factories in North America. Similar thinking works for other parts, too — seats, instrument panels, electronics, axles.
“That harnesses the strength of each country, to the betterment of the companies and to the consumer,” said Sam Fiorani, a vice president at AutoForecast Solutions, a research firm. “Vehicles would be less affordable if all the parts had to be made in one country.”
Ultimately a vehicle is considered an import when it is shipped to the United States after undergoing final assembly in another country. But because of how complex supply chains have become, it is increasingly hard to say which vehicles are American-made and which are imported.
The 2024 Chevrolet Blazer, a popular sport utility vehicle made by General Motors, is assembled in a plant in Mexico using engines and transmissions that are produced in the United States.
Nissan makes its Altima sedan in Tennessee and Mississippi; the turbocharged version of the car has a two-liter engine that comes from Japan, and a transmission made in a factory in Canada.
Then there’s the Toyota RAV4. Most RAV4s sold in the United States are made in Canada. The Canadian-made models use engines and transmissions that are built in the United States and shipped north — before the completed vehicles are transported into the United States for sale.
The Trump administration has not yet elaborated on how tariffs would be applied to components like engines that were shipped across the border and then returned to the United States as part of completed vehicles.
While the RAV4 is technically imported from Canada, about 70 percent of the vehicle’s components — as measured by their value — come from the United States, according to the National Highway Traffic Safety Administration, which tracks the place or origin of parts that go into vehicles sold here.
The Nissan Rogue S.U.V. goes the other way. It qualifies as a domestically produced vehicle because it is assembled at Nissan’s plant in Smyrna, Tenn. But only 25 percent of its content originates in the United States. The 2024 version’s engine comes from Japan and its transmission from Mexico, according to data from the traffic safety agency.
Where America’s imported cars came from in 2023
The threat of tariffs has automakers fretting. “Let’s be real honest,” Ford Motor’s chief executive, Jim Farley, said at an investor conference in February. “Long term, a 25 percent tariff across the Mexico and Canada borders would blow a hole in the U.S. industry that we’ve never seen.”
On Wednesday, the chairman of Stellantis, John Elkann, said his company supported Mr. Trump’s desire to promote American manufacturing, but added that the company — whose brands include Chrysler and Jeep — felt that trade with Mexico and Canada should remain “tariff free.”
Number of cars produced in America of any brand
Over the last 20 years, the number of imported vehicles sold in the United States has remained relatively constant, with dips caused by the financial crisis of 2008-9 and the coronavirus pandemic. The largest source is Mexico, followed closely by Japan, South Korea and Canada.
During that time, the number of cars produced in the United States has fluctuated. Domestic production exceeded 12 million vehicles in 1999, but this figure plummeted during the recession. Since then, the industry showed a strong rebound as fuel prices stabilized and consumer confidence returned, though the production volumes never fully regained the numbers seen in the early 2000s.
For many consumers, where their car comes from isn’t much of a concern. Frank Krieber, a retired tech executive from Charlotte, N.C., bought a Chevrolet Tahoe a few months ago. He assumed it was an American vehicle — and indeed, it is assembled in Arlington, Texas. But slightly more than a third of its parts are made in the United States, and about the same amount come from Mexico, according to the National Highway Traffic Safety Administration.
“I don’t mind the Mexican content,” Mr. Krieber said. “If it was made in Mexico instead of Texas, I still would have bought it.”
