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Not content with a trade war just with China, Donald Trump has opened a second front in what is slowly turning into a trade world war. Yesterday evening, Trump announced that beginning June 10th a 5% tariff would be slapped on all Mexican products coming into the country. That tariff would increase to 10% by July 1st and then go to its 25% maximum in October. For automakers with razor thin margins, there is absolute certainty that the American consumer will end up paying these tariffs. The White House said in a statement: Goods from Mexico account for 13.6 percent of all imported goods to the U.S, totaling about $346.5 billion. Automobiles and their components are high on the list of goods that are imported from Mexico. Further complicating matters is that components can move over the border up to 20 times before reaching their final assembly location. General Motors and other domestic manufacturers are going to be hit especially hard. GM imported 811,000 vehicles from Mexico last year. One of their recent vehicles, the Chevrolet Blazer, caused a stir for being Mexican built when it was put on display at Comerica Park in Detroit at a time when GM was closing five U.S. manufacturing facilities. General Motors eventually took the display down and replaced it with a US built Traverse. Stocks fell sharply Friday morning in response to the tariff announcement. -
Not content with a trade war just with China, Donald Trump has opened a second front in what is slowly turning into a trade world war. Yesterday evening, Trump announced that beginning June 10th a 5% tariff would be slapped on all Mexican products coming into the country. That tariff would increase to 10% by July 1st and then go to its 25% maximum in October. For automakers with razor thin margins, there is absolute certainty that the American consumer will end up paying these tariffs. The White House said in a statement: Goods from Mexico account for 13.6 percent of all imported goods to the U.S, totaling about $346.5 billion. Automobiles and their components are high on the list of goods that are imported from Mexico. Further complicating matters is that components can move over the border up to 20 times before reaching their final assembly location. General Motors and other domestic manufacturers are going to be hit especially hard. GM imported 811,000 vehicles from Mexico last year. One of their recent vehicles, the Chevrolet Blazer, caused a stir for being Mexican built when it was put on display at Comerica Park in Detroit at a time when GM was closing five U.S. manufacturing facilities. General Motors eventually took the display down and replaced it with a US built Traverse. Stocks fell sharply Friday morning in response to the tariff announcement. View full article -
The President has threatened to slap tariffs on the import of all cars in a year if Mexico does not completely halt the flow of illegal immigration, a near impossible task. This is after he backtracked on his previous threat to completely close the US-Mexico border, a move his own advisers recommended against. Such actions would have massive economic repercussions on both sides of the border, raising prices for many consumer goods. Trump said, "Mexico understands that we're going to close the border or I'm going to tariff the cars. I'll do one or the other. And probably start with the tariffs". He further added, "I don't think we'll ever have to close the border because the penalty of tariffs on cars coming into the United States from Mexico, at 25%, will be massive". One problem with this threat is the fresh trade agreement with Mexico that Trump has already negotiated. Going back on a fresh trade agreement adds to the longtime concerns by other world leaders on whether Trump's word, and the U.S. Government, can be trusted. Tariffs on imported goods aren't paid by the exporting country, they are paid by the consumers of the importing country, so it is unclear who Trump is targeting with these tariffs. One of the biggest automotive importers from Mexico is General Motors. GM recently had to remove a Chevrolet Blazer display from a stadium in Michigan after backlash over its Mexican origin. GM has recently closed two plants in Michigan costing the state thousands of jobs. -
Industry News: Trump Threatens Mexico with Auto Tariffs
Drew Dowdell posted a topic in Industry News
The President has threatened to slap tariffs on the import of all cars in a year if Mexico does not completely halt the flow of illegal immigration, a near impossible task. This is after he backtracked on his previous threat to completely close the US-Mexico border, a move his own advisers recommended against. Such actions would have massive economic repercussions on both sides of the border, raising prices for many consumer goods. Trump said, "Mexico understands that we're going to close the border or I'm going to tariff the cars. I'll do one or the other. And probably start with the tariffs". He further added, "I don't think we'll ever have to close the border because the penalty of tariffs on cars coming into the United States from Mexico, at 25%, will be massive". One problem with this threat is the fresh trade agreement with Mexico that Trump has already negotiated. Going back on a fresh trade agreement adds to the longtime concerns by other world leaders on whether Trump's word, and the U.S. Government, can be trusted. Tariffs on imported goods aren't paid by the exporting country, they are paid by the consumers of the importing country, so it is unclear who Trump is targeting with these tariffs. One of the biggest automotive importers from Mexico is General Motors. GM recently had to remove a Chevrolet Blazer display from a stadium in Michigan after backlash over its Mexican origin. GM has recently closed two plants in Michigan costing the state thousands of jobs. View full article
