'Everyone is confused': Trump auto tariffs spark confusion, concern in car country

Confusion and uncertainty reigned in the deeply integrated North American auto industry on Thursday, the day the Trump administration hit imports with a hodgepodge of tariffs. 

"Everyone is confused," said Peter Frise, an automotive expert at the University of Windsor. 

Faced with few new details from the White House, industry insiders on both sides of the border were struggling to understand how, exactly, the U.S. government will apply tariffs to the truckloads of vehicles and parts crossing the border every day.

"It's that unknown, that uncertainty that is kind of gripping the industry at this point," said Jeff Rightmer, an automotive supply chain expert at Wayne State University in Detroit. 

The answers the industry seeks will be highly consequential, as it helps determine how much tariffs will actually cost manufacturers — and how both autoworkers and consumers will be affected.

At 12:01 a.m. on Thursday, U.S. President Donald Trump's 25 per cent tariffs on foreign vehicles kicked in. Next month, the same tariff will be applied to car parts. The president has said the tariffs are intended to force companies to invest in U.S. manufacturing — something industry experts and economists have cast doubt upon.

But the White House has said tariffs will only apply to the value of non-U.S. content in vehicles and parts imported under the existing Canada-United States-Mexico Agreement (CUSMA). 

The confusion stems from the lack of clarity on how the administration will determine the U.S. content in those imports. In other words, the value of their American components. 

WATCH | Canada slaps matching 25% tariff on U.S.-made vehicles:

The North American auto industry relies on intricate, interconnected supply chains that stretch from Canada to Mexico.

"The problem becomes, you have certain parts that could go back and forth across the border seven or eight times" before final assembly, Rightmer said. "Is that tariff going to be applied each time it comes back and forth?

"Those are the things that really start to make this whole thing complicated," he said.

Prime Minister Mark Carney instituting retaliatory tariffs on Thursday means parts and vehicles will face levies coming into Canada, too.

It's also unclear how granular the U.S. content provisions will be — whether the administration gets as deep as raw materials, or whether the tariff will apply to parts only once they're reached a certain level of assembly.