Author: Abhirup Roy
SAN FRANCISCO (Reuters) – Auto and technology giants showing off their latest innovations at the CES trade show in Las Vegas next week can expect a barrage of questions about a topic not usually central to the consumer-focused event: tariffs.
The rally is one of the largest manufacturers, analysts and suppliers in the United States and comes days before the inauguration of President-elect Donald Trump, who has promised high tariffs on imports from Canada, Mexico, China and other US trading partners. This has raised concerns about rising costs for businesses as well as consumers.
“This is going to be a hot topic,” said strategy consultant Deborah Weinswig, CEO of Coresight Research, who said the proposed tariffs came up in nearly every conversation she had with clients ahead of CES. “This will definitely be something that senior management will have to address.”
CES 2025, formerly known as the Consumer Electronics Show, runs from January 7-10 and is used to debut products ranging from new automotive technology to quirky gadgets, as well as showcase new uses for artificial intelligence. Among the highlights this year is a keynote speech by Jensen Huang, the famed CEO of artificial intelligence chip giant Nvidia.
While artificial intelligence will continue to be the buzzword at the show, the issue of tariffs will be a major topic at policy meetings, press conferences and on the sidelines.
Companies may wonder about switching suppliers and moving production to the United States to ease supply chain disruptions — moves that take time and are expensive, analysts said.
Honda, for example, sends 80% of its Mexican production to the US market. They warned that they would have to consider shifting production if the United States imposed permanent tariffs on vehicles imported from the country.
Nearly half of the new cars sold in the U.S., and a significant share of the rest, are made elsewhere, according to Edmunds estimates. European and US carmakers could lose up to 17% of their combined annual underlying profits if the US imposes import tariffs on Europe, Mexico and Canada, according to a report by S&P Global.
PLANNING IN HYPER MODE
In addition to the tariffs, Trump said he plans to begin rolling back policies meant to promote the adoption of electric vehicles.
Many suppliers, already struggling due to weaker-than-expected demand for electric vehicles, are operating at “thin” margins and will have to radically adjust their cost structures this year in the face of possible tariffs, said Felix Stellmaszek, global head of automotive and mobility in Boston. Consulting Group.
