What's the Tariff on Auto Parts?
All imported auto parts subject to 25% Section 232.
Current Tariff Rate
25%
Pre-2025 Rate
2.5%
Rate Increase
+22.5pp
Price Impact
+25%
+$625
Real-World Price Impact
Before Tariffs
$2,500
Transmission assembly
After Tariffs
$3,125
Transmission assembly
That's $625 more per unit — a 25% price increase paid by the American buyer.
Note: Price estimates assume full tariff pass-through to consumers. Actual retail prices may vary — manufacturers may absorb some costs, shift production, or adjust margins.
The Story Behind This Tariff
The 25% auto parts tariff may be more economically disruptive than the vehicle tariff itself, because the modern auto supply chain is deeply integrated across North America. A single car contains 30,000+ parts sourced from dozens of countries — engines from Mexico, transmissions from Japan, electronics from China, wiring harnesses from Morocco. The tariff applies to all imported parts regardless of origin, creating cascading costs: a Mexican-made engine going into a US-assembled Ford F-150 now costs 25% more, raising the price of a 'domestically built' vehicle by $2,000-4,000. This undermines the USMCA's carefully negotiated rules of origin that were designed to keep North American auto manufacturing integrated. Independent repair shops face even steeper challenges — aftermarket parts from China and Taiwan, which serve 280,000 US repair facilities, see immediate price spikes that flow directly to consumers' repair bills.
📦 Supply Chain
Primary Origin
Mexico
Made in USA
40%
Import Volume
$98.7B
Alternatives
Limited — supply chain too integrated to easily restructure
📅 Tariff Timeline
2018
Section 232 investigation covers auto parts
2.5% avg MFN2020
USMCA enacted with auto parts rules of origin
0% (USMCA qualifying)2025
Section 232 tariff on all imported auto parts
25%👥 Consumer Impact
Households Affected
130M
Annual Cost Per Household
$290
💡 Did You Know?
- •A modern car's parts cross the US-Mexico border an average of 8 times during production
- •The US imports $98.7B in auto parts annually — more than the GDP of 130 countries
- •Mexico's auto parts sector employs 900,000 workers and is the US's single largest parts supplier
Tariff Details
- HTS Code
- 8708.99
- Current Rate
- 25%
- Pre-2025 Rate
- 2.5%
- Tariff Type
- Section 232
Legal Authority
Section 232 (National Security)
Effective: Various (2018-2025)
Tariffs on imports deemed a threat to national security
The tariff on Auto Parts is paid by the American importer at the port of entry and passed through to consumers as higher retail prices. The foreign manufacturer does not pay the tariff.
Who Actually Pays This Tariff?
Despite claims that tariffs are paid by foreign countries, the 25% tariff on Auto Parts is paid by American importers — US companies that purchase these goods from abroad. The cost is then passed to American consumers through higher retail prices.
- ✓ The foreign seller receives the same price as before
- ✓ The US importer pays 25% of the customs value to CBP
- ✓ The retailer marks up the higher landed cost
- ✓ You pay more at the register: $2,500 → $3,125
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