Trump's Tariffs May Result in $33 Billion Loss for US Auto Industry | Carscoops

      A trade conflict involving the three nations could adversely affect American consumers.

      Approximately 22% of all new vehicles sold in the US last year were manufactured in Mexico or Canada.

      Starting on February 4, imports from Canada and Mexico will face significant tariffs of 25%.

      Some companies are already contemplating relocating production to the US.

      Analysts estimate that President Donald Trump’s tariffs on Canada, Mexico, and China could cost the American automotive industry more than $33 billion. Lower-income consumers are anticipated to be particularly impacted by these tariffs, and a trade dispute may lead to increased prices and a higher cost of living.

      Beginning February 4, goods imported from Canada and Mexico will incur 25% tariffs, while imports from China will face a 10% tariff. The effect of these tariffs on the auto sector will be considerable. Around 27% of all imports from Mexico from January to November 2024 were vehicles and automotive parts, and 12% of Canadian imports were also vehicles and parts.

      As reported by Nikkei Asia, about 27% of all Nissan vehicles sold in the US are sourced from Mexico, and roughly 13% of Hondas sold nationwide are imported from the South. However, the tariffs will also affect domestically produced vehicles.

      The US imports nearly 60% of its oil from Canada, and in 2023, Canada constituted around 40% of the total value of minerals and metals imported into the United States.

      “Tariffs, akin to a consumption tax, disproportionately burden lower-income consumers,” stated Sayu Ueno, president of Mitsui & Co USA.

      Some international automakers are already exploring the option of shifting more production to the US to evade these tariffs. A recent report from Germany indicated that both Porsche and Audi are considering relocating some of their manufacturing stateside. The two manufacturers are examining the possibility of producing their models at Volkswagen’s facility in Chattanooga, Tennessee, which currently manufactures the Atlas and ID.4. Additionally, Audi may also produce vehicles at the South Carolina plant, which is currently under construction for the Scout brand.