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Special Update — Trump Administration and Tariff Policies

• Foley & Lardner provided an update on the potential ramifications of steel and aluminum tariffs on multinational companies.
• Foley & Lardner partner Gregory Husisian described sentiment among Chief Financial Officers on the Trump administration’s approach to trade policy in The Wall Street Journal article, “The Latest Dilemma Facing Finance Chiefs: What to Tell Investors About Tariffs.”
• Key tariff announcements include:
  • USMCA-compliant automakers have a one-month exemption from the 25% tariffs on U.S. imports from Canada and Mexico that were announced on March 4. The Trump administration announced the decision on March 5, following discussions with Ford, GM, and Stellantis.
  • In a March 5 MEMA update regarding the temporary pause of auto tariffs on Canada and Mexico, President and CEO Bill Long stated “Conversations held today indicate positive results that USMCA-compliant parts are included, but we are awaiting official confirmation from the Administration.” In breaking news on March 6, Commerce Secretary Howard Lutnick stated to CNBC: “It’s likely that it will cover all USMCA compliant goods and services, so that which is part of President Trump’s deal with Canada and Mexico are likely to get an exemption from these tariffs. The reprieve is for one month.”
  • On March 4, U.S. duties on Chinese imports were doubled to 20%. China intends to implement new tariffs on U.S. imports on March 10, and the nation added over two dozen U.S. companies to export control and corporate blacklists. 
  • The Canadian government does not plan to repeal the 25% retaliatory tariffs on approximately C$30 billion worth of goods from U.S. exporters, announced on March 4. Canada could also implement a second round of 25% tariffs in three weeks on C$125 billion of products that include cars, trucks, steel, and aluminum. Mexico plans to announce tariffs on U.S. imports on March 9.
  • 25% levies on U.S. imports of steel and aluminum could be implemented March 12.
  • Announcements could follow on April 2 regarding 25% sector-specific tariffs that would include automobile and semiconductor imports, along with broader “reciprocal tariffs” on countries that tax U.S. imports. Details have not been provided regarding the recent threat for 25% duties on European imports.
  • A February 25 executive order directed the government to consider possible tariffs on copper.

Automotive Key Developments

• U.S. new light-vehicle sales are estimated to have reached a SAAR between 16.1 and 16.3 million units in February 2025, according to preliminary analysis from J.D. Power and Haver Analytics.
• Annual U.S. auto sales could decline by 500,000 units, and up to 2 million units, if the Trump administration were to implement 25% tariffs on automotive imports from Mexico and Canada, according to automotive analysts featured in the Detroit Free Press and Bloomberg. In addition, a recession could begin “within a year” if certain tariffs “persist for any length of time.”
• The Alliance for Automotive Innovation and Anderson Economic Group estimate tariffs on Mexican and Canadian imports could raise the cost of a new vehicle by up to 25%, or by a range of $4,000 to $12,000, depending on the model.
• Crain’s Detroit reports product launch delays are impacting suppliers as automakers postpone investment decisions until there is more stability in areas that include “federal tariffs, regulatory policy and electric vehicle incentives.”
• A number of large auto suppliers are taking steps to reduce expenses in order to support profitability amid market uncertainty, according to a report in Automotive News.
• The Wall Street Journal provided overviews of the potential impact of tariffs on automakers and vehicle components, stating that “no sector is as exposed to possible Trump tariffs as the auto industry.”
• The benchmark price for domestic steel has increased 25% this year to $900 a ton, ahead of a possible 25% import tariff on the metal. 
• The Wall Street Journal reports the potential for tariffs on aluminum have already raised costs for buyers, as there are few U.S. suppliers capable of meeting supply needs after years of declining domestic production.
• The National Highway Traffic Safety Administration laid off 4% of its staff as part of a government-wide reduction of federal employees. NHTSA had expanded its workforce by roughly 30% under the Biden administration, and it was estimated to have a staff of approximately 800 prior to the job cuts.
• At the annual MEMA Original Equipment Suppliers event on February 27, the North American purchasing chief of Stellantis indicated the automaker will consider supplier requests for pricing relief. This represents a reversal of a “no more claims” policy announced in 2024.

OEMs/Suppliers

• Stellantis reported a full-year 2024 net profit of $5.8 billion on net revenue of $156.9 billion, representing year-over-year declines of roughly 70% and 17%, respectively.
• GM will temporarily halt production for a number of weeks at its Corvette plant in Bowling Green, Kentucky, for undisclosed reasons.
• Mercedes plans to reduce capacity in Germany as part of an initiative to reduce expenses by 10% through 2027 amid heightened competition, uneven demand, and high material costs. The automaker may also reduce its sales and finance workforce in China, according to unidentified sources in Reuters. 
• China’s top-selling automaker, BYD, could decide on a third plant location in Europe within the next two years. The automaker has plants underway in Szeged, Hungary, and Izmir, Türkiye.
• Detroit Manufacturing Systems, LLC will acquire Android Industries, LLC and Avancez, LLC. The combined entity, Voltava LLC, will be headquartered in Auburn Hills, Michigan, and it is expected to reach over $1.5 billion in annual revenue.

Market Trends and Regulatory

• J.D. Power estimates the average monthly payment for a new vehicle reached $738 in February, up 2.4% year-over-year. The analysis noted “vehicle affordability remains a challenge for the industry and is the primary reason why the sales pace, while strengthening, has not returned to pre-pandemic levels.”
• The new vehicle average transaction price reached $48,118 in January 2025, according to analysis from Edmunds.
• The International Longshoremen’s Association (ILA) ratified a six-year labor contract with the United States Maritime Alliance (USMX), ending months of uncertainty over the potential for a follow-up strike at U.S. East and Gulf Coast ports.
• National “right to repair” legislation was introduced in Congress last month by a bipartisan group of lawmakers. The Right to Equitable and Professional Auto Industry Repair Act (H.R. 906) follows multiple recent attempts by Congress to pass similar legislation.
• The 2026 Detroit Auto Show will take place January 14–25, 2026, at Huntington Place.
• In response to concerns over the compliance costs associated with 2025 carbon dioxide emissions standards in the European Union, the European Commission announced automakers will now have a three-year window to meet emissions targets in the bloc.

Autonomous Technologies and Vehicle Software

• Automotive News provided an update on the outlook for artificial intelligence (AI) adoption in certain automotive applications.
• A number of automakers are pursuing software and AI-based technology to differentiate their vehicles’ self-driving features, according to a report in The Wall Street Journal.
• Stellantis debuted a Level 3 automated driving system, STLA AutoDrive 1.0, that is expected to facilitate hands-free and eyes-off functionality at speeds of up to 37 mph. The automaker did not provide a launch date for the technology. The Society of Automotive Engineers (SAE) defines Level 3 as autonomous technology that can drive the vehicle under limited conditions without human supervision.
• Mercedes is currently the only automaker with a Level 3 system approved for use in the U.S., and the automaker’s Drive Pilot is only available in Nevada and California. Honda plans to launch Level 3 automated driving system in 2026, in the 0 Series in North America.
• Uber began offering its customers driverless Waymo rides in Austin, Texas.

Electric Vehicles and Low Emissions Technology

• China’s Xiaomi has a goal to deliver over 300,000 EVs in 2025, and this would more than double its deliveries last year. The consumer electronics giant sells nearly all its EVs within China.
• China announced new export restrictions on tungsten and other specialty metals used in applications that include EV batteries.
• TechCrunch analysis indicates there are currently 34 battery factories either planned, under construction, or operational in the U.S., up from two in 2019.
• Stellantis’ Brampton Assembly plant in Ontario has been temporarily shut down as the automaker reevaluates plans for the next-generation electric Jeep Compass SUV that was scheduled to begin production in early 2026. This follows a decision by Ford to delay the launch of its next-generation gas and hybrid F-150 pickup trucks.
• Canada’s zero-emission vehicle sales declined by nearly 30% in January 2025 from December 2024. This follows a halt in the federal rebate program, when funding was exhausted ahead of the original termination date of March 31, 2025.
• The Trump administration directed federal buildings across the U.S. to shut off EV chargers, according to communications from the General Services Administration described by unidentified sources in Bloomberg.
• Upstream’s 2025 Automotive and Smart Mobility Global Cybersecurity Report found that attacks involving EV chargers increased to 6% in 2024, from 4% in 2023. According to the report, 59% of the EV charging attacks in 2024 had the potential to impact millions of devices, including chargers, mobile apps, and vehicles.
• Among the top 10 battery electric vehicle (BEV) models with the fewest reported problems in the J.D. Power 2025 U.S. Electric Vehicle Experience (EVX) Ownership Study, seven were in the mass market segment. BMW iX was rated highest overall and highest in the premium BEV segment, and the Hyundai IONIQ 6 ranked highest in the mass market BEV segment.
• Consumer Reports’ Best Cars of the Year for 2025 includes six models with hybrid options and one fully electric model.
• BEV sales in Europe increased 34% year-over-year in January 2025, while overall new-vehicle registrations fell by 2.5%, according to data from the European Automobile Manufacturers’ Association (ACEA). BEVs achieved a 15% market share in Europe, compared to 10.9% in January 2024.

Analysis by Julie Dautermann, Competitive Intelligence Analyst