Cars Sold in the U.S. Made Mostly Abroad

Few would have predicted how car supply chains would be thrust into the spotlight in 2025. But with the Trump administration's new tariffs on certain imports, the North American auto industry has laid bare its logistics: supply chains that cross the borders with Mexico and Canada, sometimes multiple times for the same car, according to an analysis by visualcapitalist.com. It shows, based on data from The Economist, where the cars sold in America by the major automakers are made.

According to the cited source, Tesla has always claimed to be the "most American" carmaker, and the data above shows that this is true, at least for cars sold in the U.S. Tesla not only assembles 100% of all cars sold in America in the US, but also sources 60-70% of the parts used locally. Thus, the proposed tariffs on car imports from Canada and Mexico will probably have a minimal impact on the company.

But the other three major US automakers (Ford Motor, General Motors and Stellantis) cannot say the same. According to the cited source, Ford assembles 77% of the cars it sells on the domestic market in the US, 21% - in Canada or Mexico and 2% in other countries. In the case of Stellantis (a Franco-Italian-American manufacturer), 57% of the cars are assembled in the US, 39% - in Canada or Mexico and 4% elsewhere. Next in this ranking is the Japanese company Nissan Motor, which assembles 52% of the cars delivered to the North American market in the US, 31% in Canada or Mexico and 17% in other countries. General Motors assembles only 52% of its cars in the US, 30% in Canada or Mexico and 18% in other countries; Toyota (Japan) - 48% in the US, 27% in Canada or Mexico and 25% in other countries; Hyundai-Kia (South Korea) - 33% in the US, 8% in Canada or Mexico and 59% in other countries; Volkswagen (Germany) - 21% in the US, 43% in Canada or Mexico and 36% in other countries. The figures are for the period January - September 2024 (sales).

Thus, between 25-33% of all vehicles sold in the US by the companies mentioned come from Canada or Mexico, a percentage that does not take into account the parts used for manufacturing, notes the cited source.

According to visualcapitalist.com, the reason why supply chains are so globalized is the cost, namely it is cheaper for companies to assemble abroad. The creation of the North American Free Trade Area has allowed automakers to tap into relatively cheap labor and manufacturing facilities in other countries.

As a result, Canada and Mexico have become automotive hubs. But things have become increasingly complex: for example, American-made engines and transmissions are shipped to Canada and then assembled into a car that returns domestically to be sold to U.S. customers.

In addition to the tariffs looming on any car that is not assembled in the U.S., the "round-trip" taxation of parts is a separate concern, especially since many cars assembled in the United States can use most of their parts from foreign sources and vice versa.

Recall that last week, US President Donald Trump announced that he would impose, from April 2, 25% customs duties on all cars not manufactured in the United States. Trump specified that the tariffs would be permanent.

Subsequently, the President of the European Commission, Ursula von der Leyen, stated that the European Union deeply regrets the decision of the United States, emphasizing that the community bloc will continue to seek negotiated solutions with Washington.

Von der Leyen said, according to AFP: "Tariffs are harmful taxes for companies and even more harmful for consumers, both in the US and in the EU."

The European Commission recently decided to postpone by two weeks, until mid-April, the entry into force of its own countermeasures on American products, imposed in response to the 25% duties applied by the US on steel and aluminum imports.

Canadian Prime Minister Mark Carney also said, as quoted by CNN, that the economic relationship between Canada and the United States is at a moment of significant change, in the context of the new tariffs announced by the Trump administration. The Canadian official stressed that his government is considering measures to reduce dependence on the American partner and to diversify its trade relations. Mark Carney said: "It is clear that the US is no longer a reliable partner. It is possible that, through extensive negotiations, we can restore an element of trust, but there is no going back." The Canadian Prime Minister warned that if the tariffs on the auto sector are permanent, Canada will have to reorient its economic partnerships and accelerate initiatives to diversify exports.

For its part, the Japanese government warned that the new tariffs could have a significant impact on economic relations between Japan and the United States, but also on the global economy. Japanese government spokesman Yoshimasa Hayashi said, quoted by AFP: "We believe that these measures and other trade restrictions imposed by the US government could seriously affect economic relations between Japan and the US, as well as the multilateral trading system." Prime Minister Shigeru Ishiba said Japan was evaluating "appropriate measures" in response to the additional tariffs imposed on the auto industry and would consider "all available options".