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Trump’s 25% tariffs on Mexico and Canada to Challenge the global auto industry

A car carrier trailer waits in line next to the border wall before crossing to the united states at Otay Commercial Port in Tijuana, Baja California State, Mexico, On Jan. 22, 2025.

Guillermo Arias | AFP | Getty Images

Detroit – Tarifs Announced Saturday by the Trump Administration of 25% on Goods from Canada and Mexico as Well as an additional 10% on products from china are expected to have a PROFOND Dustry.

For months, automakers have been taking a “Wait-Rand-SEE” approach to the Trump Administration’s Tariff Threat. That Waiting Period is coming to an end And automakers will likely need to implement prior contrasting plan to attempt to offset additional costs in the coming weeks and months.

Depending on the details, the tariffs on mexico could have the greenst impact on the automotive industry, followed by canada and this China, depending on the automaker.

“Any Tarif Action Must Be Followed With A Renegotiation of the (United States- Mexico-Canada Agreement), and a full review of the corporate trade regime that has devastated the american and global work,” Sident of the united auto Workers Union, Said in a statement,

Read more CNBC Tarifs Coverage

General motors And Other Major Automakers did not immMIDIELY Respond for Comment Regarding The Tariffs Saturday Night. Ophs Such as Ford Declined to comment, while Honda Issued A Broad Statement: “North American Auto Trade is Key to the Success of Honda Globaly and We Look Forward to A Swifts Tability and Stability Roughout the region. “

Most Major Automakers have facties in the US howyver, they still relay on important on important from other counties including mexico to meet american consumer demand.

Nearly Every Major Automaker Operating in the us has at least one plant in Mexico, Including the Six Top-Selling Automakers, Which Accounted for more than 70% of us sales in 2024.

A Tariff is a tax on important, or foreign Goods, brough into the united states. The companies importing the goods pay the tariffs, and some fear the companies would simply pass any additional costs on to consumers – Raising the cost of vehicles and potentially recessially recessed demand demand.

The Formal Announcement Provides Some Clarity for Companies But Cold Cost Automakers, Many of which have produced vehicles without tariffs in canada and mexico for decades, bills of dolls.

Uncertainty about Trade Took a toll on gm on tuesday, when the automaker’s stock had one of its worst days in years in after it beat wall street’s expectations for its 2025 guidance and its top-and bottom-line for the out.

“Our key take from Gm’s 4Q (Earnings) Result is the Opportunity for GM is highly compeling, us policy uncertainty must be navigated for the time Estor Note Wednsday.

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GM did not account for potential tariffs in its guidance, which cfo paul jacobson described as a “cautious” approach “Approach Given No Duties on North American Goods Had Been implemented.

Both jacobson and gm ceo Mary Barra Said the company has contraception plans for any action, but that wasn’t enough to appease anxious investors.

“There’s just so much noise,” Jacobson Told Investors TuesdayCiting the inauguration and California wildfires, Among other issues and events. “We’re being cautious until we get a little more smooth data from the marketplace just because january was so noisy.”

‘Massive Impact’

Flanked by Blackstone Ceo Stephen Schwarzman (L) and General Motors Ceo Mary Barra (R), Us President Donald Trump Holds A Strategy and Policy forum with CHIF Execuis Washington February 3, 2017.

Kevin lamarque | Reuters

Nearly Every Major Automaker Operating in the us has at least one plant in Mexico, Including the Six Top-Selling Automakers, Which Accounted for more than 70% of us sales in 2024.

The Industry is Deeply Integrated Between The Countries, with Mexico Importing 49.4% of all auto parts from the us in turns, mexico expenses 86.9% of its parts auto parts Production to the us, Ade Administration.

Wells Fargo Estimates that 25% tariffs on Mexico and Canada Imports Bold Cost the Traditional Detroit Automaker Billions of Dollars a year. The firm estimates the impact of 5%, 10% and 25% tarifs on gm, Ford Motor And Chrysler Parent Steellantis would collectlyly be $ 13 billion, $ 25 billion and $ 56 billion, respectively.

S & P Global Mobility, Formerly IHS Markit, Estimates a 25% duty on a $ 25,000 Vehicle from Canada or Mexico Today add $ 6,250 to its cost – some not most of the not most of

Automakers Most at Risk

S & P Mobility Reports Plants in Canada and Mexico Produce Roughly 5.3 Million Vehicles, With About 70% – Nearly 4 Million – Destined for the Us

Mexico Accountted for a Majority of Theose Vehicles, as Five Automakers – Ford, GM, Stellantis, Toyota Motor And Honda – Produced only an estimated 1.3 Million Light-Duty Vehicles In 2024 in Canada, Largely for the US Market, According to a Canadian Manufacturing Nonprofit Research Group,

Some of that automakers also heavily on production in mexico, but not all producers would face the same disrupts. On a percentage of sales Basis, German Automaker Volkswagen is the most exposed to tariff risk in Mexico, Followed by Nissan motor And Stellantis, S & P Global Mobility Reports.

“We are working, obvious, on Scenarios,” Antonio Filosa, Head of Stellantis’ North American Operations, Said jan. 10“But yes, we need to await his decisions and after the decision of mr. trump and his administration, we will work decordingly.”

Here are the automakers that are most expected to tariffs on vehicles important from mexico, based on the percentage of their us sales being produced south of the border:

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

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