President Donald Trump announced Friday that he plans to implement new automobile tariffs as soon as April 2, though specific details about rates and targeted countries remain unclear.

The announcement follows Trump’s recent threat of “big tariffs on Mexican cars” during a February 10 Fox News interview. This comes amid a series of aggressive trade actions since his return to office in January, including the imposition (and subsequent delay) of 25% tariffs on Mexican goods and non-energy imports from Canada, as well as planned 25% tariffs on steel and aluminum imports set to begin March 12.

The auto industry has responded with mixed reactions. Ford CEO Jim Farley expressed support for strengthening the U.S. auto industry but warned of significant disruption, stating that a 25% tariff on Canadian and Mexican products would “blow a hole in the U.S. industry that we have never seen.” This concern stems from North America’s deeply integrated automotive supply chain, with billions of dollars in vehicles and components crossing U.S. borders weekly.

Trump’s push for auto tariffs appears motivated by perceived unfair treatment of U.S. automotive exports abroad. For example, the European Union currently imposes a 10% tariff on vehicle imports, compared to the U.S. rate of 2.5% for passenger cars.

However, implementing new tariffs on Mexican auto exports could violate the US-Mexico-Canada Agreement (USMCA), which establishes detailed rules of origin for North American-built vehicles. Under the current agreement, vehicles with at least 75% of parts originating from the three countries are exempt from tariffs.

Industry experts emphasize the complexity of the situation. Tu Nguyen, an economist at RSM Canada, highlighted the decades of collaboration that have created the current integrated supply chains, noting that certain car parts are manufactured exclusively in single countries. Matt Blunt, president of the American Automotive Policy Council, argues that vehicles and parts meeting USMCA requirements should remain tariff-free.

Some analysts suggest Trump’s tariff threats may be an opening move to renegotiate the USMCA, which is scheduled for review in 2026.