Oil Filters
Sourcing Guide & Market Intelligence

Canada and Mexico tariffs to negatively impact the vehicles and transportation sector

• On March 4, 2025, the United States imposed a 25.0% tariff on goods imported from Mexico and Canada, which applies in addition to other duties or fees that are in place. However, as of March 6, 2025, US automakers compliant with the United States-Mexico-Canada Agreement (USMCA) will be exempt from all tariffs until April 2, 2025.
• After the tariff took effect, Canada immediately imposed 25.0% tariffs on goods imported from the United States. Mexico also announced plans to impose retaliatory tariffs and non-tariff measures on imports from the United States later this month.
• According to the United States International Trade Commission, Mexico and Canada account for 47.4% of motor vehicle imports to the United States, and 54.1% of motor vehicles bodies and parts. According to Anderson Economic Group (AEG), a Michigan-based economic consultancy, the broad-based 25.0% tariff could raise new car prices by $1,000 to $4,000, and up to $10,000 if manufacturers are unable to mitigate the tariff’s impact.
• Around half of the vehicles and light trucks exported by Mexico to the United States were manufactured by the largest three Detroit-based automakers (GM, Ford, and Stellantis). Other automakers to be impacted include Honda Motor, which sells 80.0% of its Mexican output in the United States, BMW, where nearly all Mexican output is exported to the United States, and Volkswagen, which exported nearly 350,000 cars to the United States that were manufactured in Mexico.
• According to Telemetry Insights, many auto parts suppliers will be unable to absorb the tariffs or make adjustments to mitigate the tariff impact (e.g., relocating their facilities or splitting efforts across three countries). With the introduction of 25.0% steel and aluminum tariffs for Mexican and Canadian imports on March 12, 2025, and the interconnected nature of vehicle/automotive supply chains (components may cross the US-Canada and US-Mexico borders up to eight times before final assembly), tariff-related costs could drive up production costs further.

United States imposes sweeping tariffs on Canada and Mexico

• In February 2025, the United States announced 25.0% tariffs on imports from Canada and Mexico, which took effect on March 4, 2025.
• The tariff by the United States applies to all merchandise imported for consumption and applies in addition to other duties or fees that are in place. However, imported goods covered under the United States-Mexico-Canada Agreement (USMCA) will be exempt from tariffs until April 2, 2025.
• After the tariff took effect, Canada immediately imposed 25.0% tariffs on goods imported from the United States. Mexico also announced plans to impose retaliatory tariffs and non-tariff measures on imports from the United States later this month.
• On March 12, the United States raised tariffs on steel and aluminum imports from all countries to 25.0%, including Canada and Mexico.
• This market sources goods from an affected country. As such, ProcurementIQ will continue to monitor developments in this space and update analysis accordingly.

Canada and Mexico tariffs to significantly impact the energy industry

• On March 4, 2025, the United States imposed a 25.0% tariff on goods imported from Mexico and Canada, which applies in addition to other duties or fees that are in place, while duties on oil and gas imports from Canada are limited to 10.0%. However, as of March 6, 2025, all goods compliant with the United States-Mexico-Canada Agreement (USMCA) will be exempt from tariffs until April 2, 2025.
• According to the Energy Information Administration, Canada and Mexico account for 71.2% of US crude oil imports, 35.7% of US petroleum product imports, and 99.6% of US natural gas imports. The Yale Budget Lab estimates that the tariffs could lead to an overall 5.0% increase in natural gas prices, a 1.6% increase in gasoline prices, and a 1.7% increase in oil prices.
• The 4.4 million barrels of crude oil that the US imports from Canada accounts for 27.0% of total US refinery demand. US refineries near Canada are dependent on heavier or sour grades of crude oil from Canada as these grades offer the highest margins, so a higher tariff will force refiners to pass on costs to preserve margins.
• The US Gulf Coast imports 35.6% of crude oil from Mexico. The 25.0% tariff on Mexican energy imports is expected to lead to a sharper decline in the volume of crude oil imports, and likely lead to higher transportation costs and supply chain disruptions as refiners seek out alternative suppliers in South America and the Middle East.
• According to the US International Trade Administration, in 2024, Canada and Mexico accounted for 28.6% of US steel pipe and tube imports. Higher tariffs will put upward pressure on prices for oil and gas pipes, tubes, casing, as well as related equipment for drilling and exploration.