Trump Tariffs on Mexico and Canada Challenge Auto Industry

Detroit – Tariffs on Saturday announced Trump’s administration of 25% on goods from Canada and Mexico, as well as an additional 10% on products from China, is expected to have a deep impact on the global automotive industry.

For months, car manufacturers have been taking the ‘Wait and see’ approach on Trump’s tariff threat. That waiting period Near its end And car manufacturers will probably have to implement previous plans for unforeseen situations to try to make up for additional costs in the coming weeks and months.

Depending on the details, the Mexico tariffs could have the biggest impact on the automotive industry, followed by Canada and then China, depending on the car manufacturer.

“Any tariff action must be followed by negotiating [United States-Mexico-Canada Agreement]and a complete overview of the regime of corporate trade that has devastated the US and global working class, “Shawn Fain, President United United United Auto Workers, in a statement.

General Motors And the other main car manufacturers did not immediately respond to the commentary on the tariffs on Saturday night. Others like Ford refused to comment, while Honda issued a wide statement: “Auto -TRGOVINA North America is crucial to Honda’s success globally and we look forward to rapid resolution that provides clarity and stability throughout the region.”

Most of the main car manufacturers have factories in the United States, however, they still greatly rely on imports from other countries, including Mexico, to satisfy US consumer demand.

Almost every major car manufacturer operating in the US has at least one plant in Mexico, including six of the best-selling car manufacturers, which made up more than 70% of US sales at 2024.

Tariff is a tax on import or foreign goods, brought to the United States. Companies that import goods pay for tariffs, and some are afraid to simply transfer all the additional costs to consumers – increasing vehicle costs and potentially reduced demand.

The formal announcement provides certain clarity to companies, but it could cost car manufacturers, many of which have been without tariff vehicles in Canada and Mexico for decades, billions of dollars.

Insecurity in the store took the toll on GM On Tuesday, when a car manufacturer’s stock had one of her worst days in the years, even after winning the Wall Street expectations for her 2025 and Upper and Donja line for the fourth quarter.

“Our key takes from GM -A 4Q [earnings] The result is that although the opportunity for GM is very convincing, American politics must be moving so far, “Barclays said analyst Dan Levy on Wednesday in an investor note.

GM did not explain the potential tariffs in its leadership, described by CFO Paul Jacobson as a “cautious” approach with respect to the duties of goods in North America.

And Jacobson and the GM CEO Mary Barra He said the company had plans for unforeseen actions, but that was not enough to alleviate anxious investors.

“There are so many noise,” Jacobson said investors TuesdayQuoting the inauguration and California fires, among other questions and events. “We are careful until we get some smooth market data just because January was so noisy.”

“No matter the time, these blankets of blankets would have a huge influence on the auto industry,” S&P Global Mobility in the report This week. “Almost no [automaker] or the supplier “operating in North America, according to the report would be immune.

Almost every major car manufacturer operating in the US has at least one plant in Mexico, including six of the best-selling car manufacturers, which made up more than 70% of US sales at 2024.

The industry is deeply integrated between the countries, and Mexico introduced 49.4% of all car parts from the USA in return, Mexico exports 86.9% of car parts production in the US, according to the International Trade Administration.

Wells Fargo estimates that 25% of the Import of Mexico and Canada would cost the traditional car manufacturer in Detroit billion a year. The company evaluates the influence of tariffs of 5%, 10% and 25% on GM, Ford engine and Chrysler parent Stellantis It would be collectively $ 13 billion, $ 25 billion and $ 56 billion.

The S&P Global Mobility, formerly IHS Markit, estimates that 25% of the customs duties on a vehicle of $ 25,000 from Canada or Mexico added $ 6,250 to its expense – some if most could not be transferred to the consumer.

Mexico made up most of these vehicles as five car manufacturers – Ford, GM, Stellantis, Toyota engine and Honda – produced only estimated 1.3 million light vehicles 2024 in Canada, mainly for the US market, according to a Canadian production non -profit research group.

Some of these car manufacturers also rely very much about the production in Mexico, but not all manufacturers would face the same disorders. On the percentage of the sales base, the German car manufacturer Volkswagen is the most exposed to tariff risk in Mexico, followed by Nissan engine and Stellantis, S & P Global Mobility Reports.

“Obviously we work on scenarios,” Antonio Filos, Chief of Stellantis North American operations, said January 10th. “But yes, we have to wait for his decisions and after the decision of Mr. Trump and his administration, we will work accordingly.”

Here is a car manufacturer most exposed to tariffs on vehicles imported from Mexico, based on the percentage of their sales in the USA produced south of the border:

• Volkswagen: 43%
• Nissan: 27%
• Stellantis: 23%
• GM: 22%
• Ford: 15%
• Honda: 13%
• Toyota: 8%
• Hyundai: 8%