Fri, 31 Jan 2025

Trump's threat for 25% tariffs on Mexico and Canada is challenging the auto industry

On a sales basis, German automaker Volkswagen is the most exposed to tariff risk, followed by Nissan Motor and Stellantis, S&P Mobility reports.

* President Trump plans to impose 25% tariffs on imports from Canada and Mexico as soon as Saturday.
* The global automotive industry is holding its breath due to the uncertainty surrounding the tariffs.
* Automakers like General Motors may have to change their business strategies to avoid increased costs, which could be passed on to consumers.
* GM's stock had one of its worst days in years after its earnings report, with investors anxious about trade policy uncertainty.
* Tariffs could have a massive impact on the global automotive industry, potentially reducing earnings for companies like GM.
* Most major automakers rely heavily on imports from other countries, including Mexico, to meet American consumer demand.
* Estimates suggest that 25% tariffs on Mexico and Canada imports would cost traditional Detroit automaker billions of dollars a year.
* A 25% duty on a $25,000 vehicle from Canada or Mexico would add $6,250 to its cost, which could be passed on to consumers.
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