President Donald Trump imposed a new 25 percent tariff on cars imported to the U.S. last week, and it’s already making waves in the auto industry. Per Automotive News, there’s been a mixture of announcements that involve increased U.S. manufacturing, pausing production in Mexico and Canada, and even some U.S. layoffs as consequences of the tariffs.
Stellantis has paused production at its Windsor, Ontario plant, which produces Chrysler minivans and the Dodge Charger Daytona EV. It’s also temporarily halted production at its Toluca, Mexico plant, which makes the Jeep Compass and Jeep Wagoneer S EV. In addition to those temporary shutdowns at foreign plants, Stellantis has also laid off 900 workers in the U.S.
It might sound counterintuitive to lay off U.S. workers at a time when U.S. manufacturing is especially lucrative. The U.S.-based workers Stellantis laid off were producing components that were shipped to final assembly plants in Canada and Mexico. Since those final assembly plants are pausing production, they don’t need components from the Stellantis transmission, casting, and stamping facilities in Indiana and Michigan, hence the layoffs.
In addition to Stellantis’s announcement, Infiniti has paused production of the USDM QX50 and QX55 crossovers in Mexico, Volkswagen has halted rail shipments of Mexican-built USDM models south of the border, and Audi put an indefinite hold on importing any vehicles to the U.S.
However, there’s a growing number of automakers boosting U.S. production as a response to the tariffs. GM has said it would increase production of the Chevy Silverado and GMC Sierra at its Fort Wayne, Indiana plant to maximize the share of USDM trucks built domestically.
Additionally, Nissan previously said it would cut a shift at its Smyrna, Tennessee plant, but it’s reversed that decision to avoid tariffs. Mercedes-Benz is also considering moving production of an unspecified model to its Tuscaloosa, Alabama plant. These developments are in addition to previously announced investments in U.S. manufacturing by automakers like Honda, which is moving production of the next-gen Civic Hybrid from Mexico to Indiana, and Hyundai, which is opening a steel mill in Louisiana to support Kia and Hyundai plants in Georgia and Alabama.
It’s still too early to determine the impact of Trump’s tariffs on new car prices. Ford and Stellantis are running employee pricing incentives, and Hyundai Motor CEO Jose Munoz has confirmed that “there are no plans to raise prices in the United States at this time.”
