From the SEMA Washington, D.C., office
The Trump administration recently announced that auto parts that comply with the United States-Mexico-Canada Agreement (USMCA) will now be exempt from the 25% tariffs in place for imported auto parts, effective May 3.
The shift in policy follows significant efforts by SEMA and others in the automotive community to help the Trump administration understand the impacts of tariffs on domestic companies. Because tariff policy remains a fluid situation, SEMA continues to monitor and engage with the federal government on behalf of our members and the automotive aftermarket industry.
President Trump in his April 29 executive order provided immediate relief to industry businesses that manufacture USMCA-compliant parts. The order extended the 0% duty rate for USMCA-compliant components, a decision that offers temporary but critical relief for Tier 1 suppliers and many aftermarket parts businesses.
According to United States Customs and Border Protection, the exemption ensures that parts sourced from Mexico and Canada remain untaxed if they meet the trade agreement's requirements. The tariff reprieve comes as automakers face significant financial strain, with General Motors projecting a potential $5-billion cost from the broader tariff regime.
Behind the Scenes
In response to the rollout of tariffs on everything from steel and aluminum to auto parts to country-specific tariffs, SEMA sought direct feedback from its members on the impact of the various tariffs on their companies. SEMA has used this information when communicating the impacts to federal lawmakers and Trump Administration officials.
Although short-term relief is welcome, SEMA remains vigilant about emerging updates that can impact the specialty-equipment industry. President Trump retains the authority to revisit the policy and impose tariffs--even on USMCA partners.
For additional information, contact Juan Mejia, SEMA's senior manager for federal government affairs, at juanm@sema.org.
This story was originally published on Tuesday, May 6.
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