Almost all car manufacturers will feel a pinch of the new rates imposed by President Trump on Saturday on goods imported from Canada, Mexico and China.
Car manufacturers send dozens of billions of dollars to finished cars, motorbikes, transmissions and other components across the American borders with Canada and Mexico every week. Billions of dollars more are imported from parts manufacturers in China.
The rates, which will come into effect on Tuesday at 12:01 pm, are generally expected to increase the prices that American consumers pay for new cars. And the rates come at a time when new cars and trucks are already selling for almost record prices.
General Motors, the largest American car maker, will probably be the most affected.
GM produces many more vehicles in Mexico than any other manufacturer than 842,000 in 2024, according to Marklines, a data provider of the auto-industry. And some of those vehicles are the most important in the company's line -up.
All Chevrolet Equinox and Blazer Sport-Utility vehicles that GM sells in the United States are from Mexico. The Chevrolet Silverado Pick-up, a best-selling model and the comparable GMC Sierra-Pick-up generate enormous profit for the company. Of the more than a million of those trucks built last year, almost half were produced in Canadian and Mexican plants, according to data from Marklines.
All in all, GM factories in Canada and Mexico produced nearly 40 percent of all vehicles that the company made in North America last year, the region where it gets the most of its income and almost all its profit.
Several other car manufacturers, including Stellantis, Toyota and Honda, also make around 40 percent of their North -American cars and trucks in Canada and Mexico, but they produce fewer vehicles than GM, so most car manufacturers may not feel the impact of the rates Acute ZO GM
“Rates are a very, very large threat to manufacturers and states for automatic production,” said Patrick Anderson, Chief Executive of Anderson Economic Group, a consultancy firm based in Michigan. “And it is clear that GM is more vulnerable than most car manufacturers because of the production printing print it has in North America.”
Mr Anderson said that the most immediate impact of the rates will be delays and confusion at the border crossings such as customs accessories, shippers and ports to find out how to deal with the vehicles and parts that are already on trucks and trains on their way to the border.
He estimated that the rates could add $ 10,000 or more to trucks and other larger vehicles that are shipped from Canada and Mexico to the United States. “Much of them, at least in the short term, is absorbed by customers and car dealers,” he said.
Manufacturers must look for ways to shift and adjust production to avoid or limit the burden of the rates, he added.
Few car manufacturers have spoken about President Trump's plans. Auto pipers have acknowledged that they are hesitating to say something essential about rates because they do not want to make Mr Trump angry and retreat from him, his assistants and other federal officials.
The lobbying group that represents the three Detroit car manufacturers, the American Automotive Policy Council, has issued a statement and said that vehicles and parts that comply with national and regional content rules of the United States-Mexico-Canada agreement must be exempt from rates.
“Our American car manufacturers, who have invested billions in the US to meet these requirements, are not allowed to undermine their competitiveness due to rates that will increase the costs of building vehicles in the United States and Stymie investments in the American worker,” ” Matt Blunt, President, President, President, President of the Group, said.
Jennifer Safavian, the president and chief executive of Autos Drive America, a lobby group that represents foreign car manufacturers with activities in the United States, said in a statement that “the North American car industry is strongly integrated and the imposition of rates will be harmful For American jobs, investments and consumers. “
GM has viewed several steps that it could take to ease the impact of rates, such as increasing pick -up production in the United States, and the use of Canadian and Mexican factories to export vehicles to countries outside of North America .
“We do the planning and have different levers that we can draw,” said the company's chief executive, Mary T. Barra, last week in a conference call to discuss the financial results of GM.
Mark Wakefield, Global Automotive Market Lead at Alixpartners, a consultancy firm, said that rates can lead to job losses at car and car parts factories in North America, while manufacturers participate to get to get.
“Northern America has been treated by the car -industry for decades,” he said. “You will probably see prices rising and sales are falling. Fewer vehicles should be built. “
The car industry will have difficulty absorbing the costs of the rates or to move the production to avoid them, said Linda Hasenfratz, the executive chairman of the car part company Linamar, in a statement to the New York Times.
“If the rates of 10 percent or 25 percent are imposed on car parts that cross the border, I think we will soon stop making vehicles in North America,” said Mrs. Hasenfratz. “Auto parts are highly developed products that require months or years to detect, validate and test before they are built into a vehicle. They simply cannot be replaced at night. “
Stellantis, who owns Chrysler, Dodge, Jeep and Ram, all his Chrysler Pacifica minivans in a plant in Windsor, Ontario. It also makes the Dodge Charger Muscle Car, including a new electric version, there. About two-thirds of his very profitable RAM pickups are made in the United States, but the other third comes from a factory in Saltillo, Mexico.
Stellantis did not respond to a request for comment.
Toyota and Honda rely heavier in Canada than other manufacturers. Both earn more than a million vehicles a year in North America, and plants north of the border are good for more than a quarter of them.
Toyota makes some RAV4 SUVs in the United States, but most of the plants in Woodstock and Cambridge, Ontario. The company also makes Lexus SUVs in Ontario. Honda is in a similar position with its Civic Sedan and CR-V SUV-De Most are made in Alliston, Ontario.
The rates create a bond for some companies that do not have many plants in North America. Three of Volkswagen's best-selling vehicles in the United States-the Jetta Sedan and the Taos and Tiguan SUV's are made in Mexico. The company has one factory in the United States, in Chattanooga, where it makes other SUVs in 2024, Volkswagen sold more than 230,000 Mexican vehicles in the United States, about 70 percent of its turnover in the country, the company, The company, the company, the company, the company, the company, the company, the company, the company, the company, the company, the company, the company said.
“We remain a strong advocate for free and fair trade,” Volkswagen said in a statement. “We are convinced that open markets have been a driving force behind global economic growth and prosperity, promoting innovation and creating opportunities for companies and communities worldwide.”
Just like its rivals, Ford Motor produces some important models in Canada and Mexico. The electric Mustang Mach-E, Maverick Pickup and Bronco Sport, a compact sport-utility vehicle, have been assembled in Mexico. The only car assembly factory of the company in Canada was in May, although it still makes engines in two factories in Windsor.
But Ford is less exposed than most. It made nearly 2.5 million vehicles in North America last year and more than 82 percent rolled out of the American assembly lines. All its high-margin medium and full-size pickups are made in their own country. Only 2 percent of production came from Canada and 16 percent from Mexico.
“Ford is the most dedicated to build in America among the major car manufacturers,” the company said at the end of November in a statement in reference to why the shares had fallen less than other car manufacturers after the election of Mr Trump.
Ian Austen contributed reporting.
