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The auto industry breathed a sigh of relief yesterday as it was announced that they will be exempt from the 25% tariffs on Mexican and Canadian goods. Plus, we’re looking at the cars that hold their value the best, and Google’s push towards AI search.

Show Notes with links:

• The auto industry is temporarily relieved by a one-month exemption from the 25% tariffs on vehicles covered by the United States-Mexico-Canada Agreement (USMCA). President Trump granted the reprieve following requests from Ford, GM, and Stellantis, with the ultimate goal of shifting production to the U.S.
  • The automotive provisions of the USMCA require that 75% of a vehicle's components be made in North America (up from 62.5% under NAFTA) to qualify for zero tariffs, and mandate that 40-45% of auto parts be made by workers earning at least $16 per hour, aiming to boost North American production and labor standards.
  • Most automotive manufacturers comply with USMCA standards and The American Automotive Policy Council and automakers expressed gratitude for the temporary exemption.
  • Suppliers remain concerned about long-term impacts, despite positive signs for USMCA-compliant parts.
  • Dealers and industry experts view the exemption as part of a broader strategy to encourage domestic manufacturing, but uncertainty persists.
  • “The damage has already been done. For an industry that operates in three- to five-year product cycles, this level of day-to-day uncertainty is debilitating.” — Glenn Stevens, Executive Director of MichAuto.

• Last week we covered the cars with the most depreciation, and now, Kelley Blue Book has announced its annual Best Resale Value Awards, highlighting the top performers of 2025.
  • The top 10 vehicles are projected to retain an average of 58% of their original MSRP, compared to the market average of 44.6%.
  • Toyota dominates the list, securing four of the top ten spots, including the #1 2025 Toyota Tacoma with a projected 64.1% resale value.
  • The full top 10 list includes the 2025 Toyota GR Supra (53.7%), 2025 Porsche 911 (53.8%), 2025 Toyota RAV4 (53.9%), 2025 Honda CR-V (54.4%), 2025 Mercedes-Benz G-Class (56.6%), 2025 Ford Bronco (57.0%), 2025 Toyota 4Runner (60.0%), 2025 Toyota Tundra (60.9%), 2025 Chevrolet Corvette (61.0%), and 2025 Toyota Tacoma (64.1%).

• Google is accelerating its AI integration into search with a new feature called AI Mode, adding a chatbot-like experience directly to the core of Google Search.
  • AI Mode, currently in testing, is only available to Google One AI Premium subscribers and must be enabled in the Labs section of Search.
  • The feature offers a search-centric chatbot experience, delivering AI-generated answers directly from Google’s search index with supporting links throughout.
  • AI Mode uses the Gemini 2.0 model, aiming to improve Google's ability to handle more advanced queries while providing real-time data and web

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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