Impact of Trump’s Tariffs on Auto Industry in Canada and Mexico

The United States is set to impose tariffs on Canada and Mexico, potentially affecting many automakers, including Audi, BMW, Ford, and General Motors. These tariffs might reach 25%, impacting vehicles and auto parts exported to the U.S. The decision ultimately rests with President Trump, and automotive companies are preparing for potential cost increases and shifts in production strategies.

The United States plans to implement tariffs on Canada and Mexico, potentially reaching 25%. President Trump will ultimately decide on the rates, affecting numerous automakers with significant operations in these countries. Several popular vehicles, including the Ram pick-ups and Chevy Silverado, as well as key auto suppliers, could face increased costs due to these tariffs.

Among automakers likely impacted are:

– Audi: The San Jose Chiapa, Mexico plant produces the Q5 and exported nearly 40,000 vehicles to the U.S. in early 2024.
– BMW: The San Luis Potosi facility manufactures the 3 Series and 2 Series models, predominantly for the U.S.
– Ford: With three plants in Mexico, Ford exported nearly 196,000 cars to North America, 90% of which went to the U.S. in early 2024.
– General Motors (GM): GM imported approximately 750,000 vehicles from Canada and Mexico to the U.S. in 2024, with many popular models produced in Mexico.

Additionally:
– Honda: The majority of its Mexican output goes to the U.S., leading the company to consider production shifts under tariff pressure.
– Kia: Strikes a deal producing vehicles in Mexico, including Santa Fe SUVs for Hyundai, focusing on export to the U.S.
– Mazda: Has exported around 120,000 vehicles from Mexico to the U.S. in 2023, warning of potential investment reconsiderations.
– Nissan: Currently, it has two plants in Mexico producing key models for the U.S. market.

Stellantis operates assembly plants in Mexico producing various models, including Ram pick-ups and Jeep SUVs. Toyota produces Tacoma trucks in Mexico and sold over 230,000 units in the U.S. in 2023, representing 10% of its U.S. sales.

Volkswagen’s Puebla plant manufactured approximately 350,000 cars, predominantly for U.S. export. Both Michelin and Autoliv, recognized as major auto parts manufacturers, have extensive operations across Mexico and Canada, employing thousands of individuals.

Additionally, prominent parts suppliers like Yanfeng also maintain production facilities in Mexico. Other important manufacturers in Mexico include Pirelli and Brembo, focusing on tyres and brakes, respectively.

The impending U.S. tariffs on Canada and Mexico, determined by President Trump, threaten multiple automakers and auto suppliers with significant operations in these regions. Prominent companies like Audi, BMW, Ford, and GM may face substantial impacts on their export volumes, price structures, and future investments depending on the tariffs implemented. The situation remains critical as it could alter the landscape of automotive manufacturing in North America.

Original Source: www.independent.co.uk