Trump's tariffs on Mexico and Canada challenge the automotive industry

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

For months, automobile manufacturers have been adopting an “wait and see” approach for the Trump administration tariff threat. This waiting period is coming to an end and car manufacturers will probably need to implement previous contingency plans to try to compensate for additional costs in the coming weeks and months.

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

“Any tariff action must be followed with a renegotiation of the [United States-Mexico-Canada Agreement]And a complete review of the corporate commercial regime that has devastated the American and global working class, “said Shawn Fain, president of the Union of Automobile Workers, in a statement.

General Motors And other important automobile manufacturers did not respond immediately to comment on rates on Saturday night. Others such as Ford declined to comment, while Honda issued a broad statement: “The automotive trade of North America is key to Honda's success worldwide and we expect a rapid resolution that provides clarity and stability throughout the region.”

The majority of the main car manufacturers have factories in the US.

Almost all important automobile manufacturers operate in the US.

A tariff is an import tax, or foreign goods, brought to the United States. Companies that import goods pay tariffs, and some fear that companies simply pass additional costs to consumers, which increases the cost of vehicles and potentially reduces demand.

The formal announcement provides some clarity for companies, but could cost car manufacturers, many of which have produced vehicles without tariffs in Canada and Mexico for decades, billions of dollars.

The uncertainty about commerce affected GM on Tuesday, when the actions of the car manufacturer had one of their worst days in years, even after he expired the expectations of Wall Street for his guide of 2025 and its end and lower for the room quarter.

“Our key takes 4q from GM [earnings] The result is that although the opportunity for GM is very convincing, the political uncertainty of the United States must navigate at the moment, “said Barclays analyst Dan Levy in an investor note on Wednesday.

GM did not take into account the possible tariffs in his guide, which the financial director Paul Jacobson described as a “cautious” approach that had not yet been implemented duties of US assets.

Both Jacobson and the CEO of GM, Mary Barra, said the company has contingency plans for any action, but that was not enough to appease anxious investors.

“There is a lot of noise,” Jacobson told investors on Tuesday, citing the forest fires of inauguration and California, among other issues and events. “We are being cautious until we get a little more market data just because January was very noisy.”

Tariffs could have a massive effect on the global and potential automotive industry to reduce profits for companies such as GM, which has significant manufacturing operations in North America.

“Regardless of time, these general rates would have a massive impact on the automotive industry,” said S&P Global Mobility in a report this week. “Practically not [automaker] or the supplier “to operate in North America would be immune, according to the report.

Almost all important automobile manufacturers operate in the US.

The industry is deeply integrated among countries, with Mexico importing 49.4% of all US car parts. UU. In turn, Mexico exports 86.9% of its auto parts production to the US International Trade Administration.

Wells Fargo estimates that 25% rates in imports from Mexico and Canada would cost the traditional car manufacturer thousands of dollars a year. The company estimates the impact of 5%, 10% and 25% of GM tariffs, Ford motor and Chrysler's father Stellantis It would be collectively $ 13 billion, $ 25 billion and $ 56 billion, respectively.

S&P Global Mobility, previously IHS Markit, estimates a 25% service in a $ 25,000 vehicle in Canada or Mexico would add $ 6,250 at its cost, some, if not, most of which could be transmitted to the consumer.

S&P Mobility Reports Plants in Canada and Mexico produce approximately 5.3 million vehicles, with approximately 70%, almost 4 million, destined for the United States.

Mexico represented most of these vehicles, such as five automobile manufacturers: Ford, GM, Stellantis, Toyota motor And Honda: it produced only one estimated of 1.3 million light service vehicles in 2024 in Canada, largely for the US market, according to a non -profit research group of Canadian manufacturing.

Some of these car manufacturers also greatly trust production in Mexico, but not all producers would face the same interruptions. On a sales percentage, German car manufacturer Volkswagen It is the most exposed to tariff risk in Mexico, followed by Nissan motor and Stellantis, Global Mobility Reports of S&P.

“We are obviously working on stage,” said Antonio Filosa, head of the North American Stellantis operations, on January 10. “But yes, we must wait for your decisions and after the decision of Mr. Trump and his administration, we, we, we, we will work accordingly.”

Here are car manufacturers that are most exposed to tariffs of vehicles imported from Mexico, depending on the percentage of their US sales that occur south of the border:

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