Trump's Tariffs On Mexico And Canada Are Here And Ready To Screw Up The Auto Industry

Good morning! It's Tuesday, March 4, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's edition, we're diving into President Donald Trump's 25 percent tariffs on goods imported from Canada and Mexico and Carvana's first dealership that sells new cars. We're also going to look at Uber and Waymo's driverless rideshare service in Austin, Texas as well as headcount cuts Mercedes-Benz is making to save some dough.

Lock in. It's going to be another busy day.

After a lot of waiting and crossing our fingers this day would never come, President Donald Trump's 25 percent tariffs on goods imported from Canada and Mexico and 20 percent tariffs on China are here. Buckle up, because it's about to get gnarly. Now, Canada and Mexico plan to respond with their own retaliatory measures, including tariffs and trade restrictions. Canada threw a 25 percent duty on $30 billion worth of American goods. In three weeks, that number increases to $125 billion in goods. This is all so stupid. I just hope you guys bought whatever you really needed yesterday because everything is about to get a lot more expensive — especially cars.

Suppliers are automakers are widely expected to pass the costs onto — you guessed it — the consumer. The cost of many North American vehicles could rise between $4,000 and $10,000 because of these tariffs and retailiarty measures. This sucks, man. I mean, what the hell are we even doing here? From Automotive News:

Some of the top-selling vehicles in the U.S. are imported from Canada or Mexico. They include the Toyota RAV4 — the biggest-selling utility vehicle in the U.S. — and full-size pickups from Chevrolet, GMC and Ram. Others include the Ford Mustang Mach-E, Bronco Sport and Maverick; the Chevrolet Equinox and Blazer; the GMC Terrain; the Lexus RX; the Honda HR-V, Civic and CR-V; the Hyundai Tucson; the Audi Q5; and the Volkswagen Jetta, Taos and Tiguan.

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Executives at major suppliers have said in recent weeks that tariffs could prove to be "untenable" for the supply base, which is coming off years of reduced profits and volatility caused by the pandemic, microchip shortage and inflation.

MEMA, the trade organization representing U.S. suppliers, has warned of "severe consequences" for parts makers. Tariffs could jeopardize jobs, increase costs on consumers and discourage domestic investment in emerging technologies, MEMA said.

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Some parts makers have said assembly and parts plants in all three countries could be stopped within days of tariffs coming into place.

The industry should be prepared for much of the auto production in the U.S. and Canada "to go to 2020 pandemic-level idling & temporary layoff within the week," said Flavio Volpe, president of the Automotive Parts Manufacturers' Association, in a March 3 post on X, the social media platform formerly known as Twitter. The association represents suppliers in Canada.

Right now, no one has any earthly idea how long these tariffs will remain in place or whether the U.S. will reach some sort of deal with Canada and Mexico. Until then, hold onto your butts.

If you're curious and want more info on how these tariffs could reshape North American auto production, I highly suggest you head over to AutoNews as soon as you're done reading today's Morning Shift for the full rundown of what could happen.

Carvana is looking to try something new, and that's why the online used car giant decided to purchase its first franchise dealership. That's right, Carvana is now the proud owner of a Stellantis dealership Casa Grande, Arizona, just 45 miles from where the company is headquartered in Tempe.

I'm not totally sure how much Carvana branding the dealer will have, since the dealership is going to be called Casa Grande Chrysler-Dodge-Jeep-Ram. Still, this is sort of an interesting and unexpected development from a company that has exclusively sold used cars on the internet for over a decade. 

Here's what a Carvana spokesperson told Automotive News:

"We're always experimenting and this is a small test in a single market. We are excited to join the Stellantis network and our focus in this test will be learning how to provide great customer experiences at a franchise dealership — we don't expect it to have any noticeable impact to our results for the foreseeable future."

To be fair, it's not exactly unheard of for these huge used car dealers to own new car stores. CarMax owned new car dealers from the mid-1990s until 2021. 

It'll be interesting to see how this shakes out for Carvana, a company that seems to be on the upswing after taking on a ton of water during the Pandemic. 

Starting today, Uber will be offering customers driverless Waymo rides in Austin, Texas. It marks the official start of a planned team-up of the two companies. Anyone who orders an UberX, Uber Green, Uber Comfort or Uber Comfort Electric could actually end up being matched with one of Waymo's self-driving Jaguar I-Paces at no additional cost. Customers can say no to a driverless vehicle and get a good ol' fashion Uber instead. From Bloomberg:

Uber and rideshare peer Lyft Inc. previously shut down costly efforts to research and develop their own self-driving technology. Since then, their autonomous strategy has involved teaming up with driverless-vehicle makers, autonomous-software developers and local fleet managers. Uber has struck more than a dozen global partnerships to deploy self-driving technology across its rideshare, delivery and freight businesses.

Uber first began offering Waymo rides and deliveries in Phoenix, Arizona, in 2023. While Waymo also offers rides through its own consumer app in Phoenix, Uber said last fall that its app would be the sole platform offering Waymo rides in Austin. Uber will also be the exclusive provider of Waymo rides in Atlanta starting this summer.

In Austin and Atlanta, Uber will manage Waymo fleet services such as car cleaning, maintenance and charging in partnership with Spanish fleet operator Avomo, according to the statement. Uber in 2021 bought a 30% minority stake in Avomo, formerly known as Moove, according to Uber's most recent annual report. It also pledged to invest as much as $185 million into Avomo through early 2029. Waymo remains responsible for vehicle testing, roadside assistance and certain aspects of rider support, Uber said.

From where I'm sitting, it's hard to really overstate how far ahead Waymo is than just about every other automotive vehicle developer. Hell, Tesla, a company that has staked its future on driverless vehicles, is planning to start a ride-hailing service in California... using human drivers.

Mercedes-Benz has reached an agreement with its work council, allowing it to offer buyouts to staff and cut planned salary increases in half. It's all part of a broader cost-cutting effort from the German automaker to turn earnings around. Right now, there's no word on exactly how many jobs will be cut, but it did say workers in production wouldn't be affected. From Reuters:

CFO Harald Wilhelm said at the carmaker's annual results conference last month that it planned to outsource areas from finance and human resources to procurement, reducing the size of the workforce through not replacing workers who retire and negotiating voluntary redundancies.

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Europe's auto industry faces a swathe of challenges this year, with carmakers and component makers announcing deep cuts and Germany's powerful unions putting up a fierce fight against pressure by management to cut jobs, close factories and move staff abroad.

The automaker aims to reduce production costs by 10 percent by 2027 and 20 percent by 2030. That goes beyond an ongoing plan launched in 2020 to reduce costs by 20 percent between 2019 and 2025.

On this day in 1929, David Buick, the founder of — you guessed it — Buick died quietly and pretty mich broke at the age of 74. Here's more on his life from History.com:

Buick was born in Arbroath, Scotland, on September 17, 1854, and moved with his family to Detroit, Michigan, as a child. As a young man, he worked in the plumbing industry and developed, among other inventions, a successful process for bonding porcelain enamel to cast-iron bathtubs.

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In 1903, he founded the Buick Motor Company. The following year, William Durant, a titan of the horse-drawn carriage industry, invested in Buick's company, which was by then based in Flint, Michigan.

That same year, the company made a total of 37 autos, known as the Model B. By 1906, Buick had lost control of the business and sold his stock, which would later be worth millions of dollars. Two years later, in 1908, William Durant made the Buick firm the cornerstone of his newly formed holding company, General Motors. Durant soon acquired Cadillac and Oldsmobile, among other car companies. In 1923, Buick built its 1 millionth vehicle. The Buick brand would play a key role in General Motors' rise to become the world's largest automaker by the early 1930s