New Report from Hunt Institute Examines Tariff Pressures
The Big Picture
The Hunt Institute for Global Competitiveness, in collaboration with the U.S.–Mexico Foundation, released this week a new white paper analyzing how escalating steel and aluminum tariffs are reshaping cost structures and supply chains across North America’s automotive sector.
At a moment when both metals now face tariff rates as high as 50%, the report provides one of the clearest, data-driven assessments available — bringing together policy analysis, trade data, and regional industry expertise to examine how these pressures ripple across the integrated U.S.–Mexico–Canada manufacturing system.
Why This Report Matters
The automotive industry is one of North America’s most interconnected production networks, with components often crossing borders multiple times before final assembly.
Tariff shifts on foundational materials therefore carry outsized implications for competitiveness and regional coordination.
The new report highlights:
- How steel and aluminum — together making up about 75% of a vehicle’s total weight — are central to the cost equation, with an average vehicle containing roughly 1,000 pounds of steel and 350–560 pounds of aluminum.
- The impact of the 2025 tariff increases, which have doubled duties on both metals and raised compliance burdens for manufacturers.
- How new USMCA origin rules taking effect in 2027 will add further pressure as manufacturers rethink sourcing strategies.
- The continued reliance on imported metals, particularly aluminum, where domestic U.S. production cannot meet industrial demand.
By linking material costs, trade rules, and real supply-chain behavior, the report offers timely guidance for industry leaders, policymakers, and regional stakeholders.
Inside the Report
The white paper draws on multi-country data and case analysis to examine:
- The current state of steel and aluminum production and import patterns across North America.
- How tariff volatility increases production costs and reshapes sourcing decisions.
- The complex reality of cross-border manufacturing — illustrated through examples like a single aluminum piston that travels through Canada, the U.S., and Mexico six times before reaching a finished vehicle.
- What rising costs mean for consumers, pricing strategies, and future EV and advanced-manufacturing investment.
The report concludes with forward-looking considerations tied to the 2026 USMCA review, calling for deeper regional coordination and stronger metals capacity across the continent.
Download the Full Report
Access the white paper here:
