America Enters A Wacko Period Where We Put 25% Tariffs On the Same Cars We Then Offer $7,500 Tax Incentives For, Please Tell Us How This Makes Sense

I’ll never pretend to hold an economics or political science degree. Nor will I willingly ever be an expert on import duties, tariffs, and tax credits. All of them make my head hurt. But I know a weird situation developing when I see one. And the 2025 Chevrolet Equinox EV is a good example of just how kooky the U.S. car market manipulation has gotten.

The Chevy Equinox EV (a fine vehicle by all accounts) is built in Mexico using very important Mexican-made parts. Therefore, we’ll assume that the Equinox is covered under the new 25% import tariff. Here’s what CNBC says today about cars made in Mexico:

On Wednesday, President Donald Trump announced a new 25% tariff on imported cars and key auto parts, effective April 3. The new policy builds on earlier tariffs targeting Canadian, Mexican, and Chinese goods by introducing a specific measure aimed at the auto industry.

OK, so the 2025 Chevrolet Equinox is a ringer for the whole “Not Made in the United States” exclusionary theme. It is assembled in the Ramos Arizpe plant in Coahuila, Mexico. A plant that GM poured a billion American dollars into not long ago to build EVs. Our validation of this fact includes a pair of Monroney stickers for the Equinox, one a 2024 and one a 2025. The stickers also reveal that the electric drive unit is made in  - you guessed it - Mexico. So, ding, ding, this vehicle will have a 25% import tariff. 

Will Mexican-made vehicles be subject to the new 25% tariff? Here's what Reuters reports:

Canada and Mexico won protections against potential new U.S. auto tariffs in 2018 as part of the U.S.-Mexico-Canada Agreement on trade, but there is no evidence that President Donald Trump will honor those commitments as he imposes 25% duties on global automotive imports.

The Chevrolet Equinox EV is also an EV that GM advertises this way:

New Equinox EV purchases still qualify for a federal tax credit of up to $7,500 for eligible buyers, which can be applied toward the vehicle price at the time of sale by qualified and participating dealers.

We trust that GM knows what cars do and do not qualify for United States Federal Income Tax credits. As I pointed out above, I try very hard not to become an expert in such matters. I’d rather bang my head on a wall (not a border wall, of course). What I can say is that this screenshot was taken on the day that I published the story.

So, using the base LT trim as our example. GM says the price is $33,600. Therefore, the difference between the 25% import duty and the $7,500 tax credit is about 2% of the vehicle price if we managed our "goes-intas" right. I don’t want to start a riot in the comments section, but why exactly is the United States of America offering a tax break on a car built in Mexico from key parts made in Mexico and then also asking for a 25% import duty? 

What say you readers? Does it make sense to you that the federal government is both incentivizing and also disincentivizing this very same automobile? Let us know in the comment section, and please keep it civil. 

Author Note - The author has not expressed any personal opinion on tax credits or tariffs. He does hold the opinion that GM makes excellent vehicles, including the Equinox EV. 

Image notes and credits - Top of Page Grok AI image made by John Goreham. Pair of Monroney stickers image by John Goreham. Screenshot of GM's public-facing advertisement by John Goreham courtesy of General Motors. 

John Goreham is a credentialed New England Motor Press Association member and expert vehicle tester. John completed an engineering program with a focus on electric vehicles, followed by two decades of work in high-tech, biopharma, and the automotive supply chain before becoming a news contributor. He is a member of the Society of Automotive Engineers (SAE int). In addition to his eleven years of work at Torque News, John has published thousands of articles and reviews at American news outlets. He is known for offering unfiltered opinions on vehicle topics. You can connect with John on Linkedin and follow his work on his personal X channel or on our X channel. Please note that stories carrying John's by-line are never AI-generated, but he does employ grammar and punctuation software when proofreading and he also uses image-generation tools.