This would increase cars prices in the US without a definitive agreement of tariffs with Canada and Mexico
The rates imposed by USAcurrently in pause, to imports of Canada and Mexico vehicles prices in the US market could significantly increase and affect the gain margins of car manufacturers, according to analysis of S&P Global Mobility. The average price of a imported car From Mexico or Canada, which is around $ 25,000, it could increase to $ 6,250 if 25% rates enter into force.
Michael Robinet, vice president of forecasts of S&P Global Mobilityhe said that these rates could not only make vehicles more expensive, but also to alter the Production scheduleswith a possible 30% decrease in the vehicle manufacturing of high exposure if they are implemented, even in the short term, according to the information of CBS News.
On February 1, Trump signed a Executive order which imposes 25% tariffs on imports from Canada and Mexico, as well as a 10% tax on Chinese products. However, the White House temporarily suspended these rates for its American partners for at least a month, while negotiations are developed.
In response to the pressure of the Trump administrationthe Canadian Prime Minister, Justin Trudeau, and the president of Mexico, Claudia Sheinbaum, promised to intensify efforts to combat the drug traffic and the irregular migration towards the United States, according to CBS News.
Jim Farley, executive director of Ford Motor Companyhe declared during a call of results that the company could bear “a few weeks of rates”, but that a prolonged period would affect its earningsit would make vehicles more expensive and slow down the economic growth. Farley indicated that rates of 25% would have a considerable impact on the US automotive industry, eliminating billions of dollars in benefits and affecting the employment in the sectoraccording to CBS News.
Farley explained that Ford It has sufficient inventory, including pieces, to maintain production for a few weeks without importing components from Canada or Mexico. However, in the long term, the company must consider strategic changes significant, such as the construction of new plants in the United States to avoid tariffs, according to CBS News.
Mary Barra, executive director of General Motorsalso mentioned the possible effects of rates on their operations, noting that the company is evaluating the Restructuring of its supply chain To mitigate the impact, according to CBS News.
For its part, Apivcomponent supplier for vehicles, warned that rates could harm their Supply chain. The company manufactures software, hardware and electrical architectures for the automotive industry, according to CBS News.
Marcus Noland, expert in Commercial policy of the Peterson Institute for International Economicshe declared to CBS News That the economies of the United States, Mexico and Canada are closely linked, and that the rates will seriously affect the automotive industry, since the pieces cross the borders between seven and eight times before the Final assembly. This implies that tariffs would apply at each border crossing, rapidly increasing costs.
Noland added that, although manufacturers could Relocate part of the production In the United States to avoid tariffs, this process will require time and investments in new facilities and labor, according to CBS News. Also warned that rates could negatively affect the Mexican economydependent on Automobile exports to the United States, which could increase irregular migration north.
According to S&P Global Mobilitythe relocation of production in the United States would generate higher costs Due to the highest wages and could aggravate the labor shortage existing. Duncan Angove, executive director of the company of digital supply chains Blue Yanderhe declared to CBS News that American car manufacturers are expected to increase their investments in automation and artificial intelligence To reduce costs.
Angove indicated that, if the prices of new cars go up, it is likely that more American consumers they resort to the market used carswhich will also make second -hand vehicles more expensive, according to CBS News.
Jim Farley from Ford warned that tariffs could benefit foreign competitors Not subject to these taxes, such as Hyundai South Korea and Sling and Toyota from Japan. Farley pointed out that a prolonged tariff policy should be integral for the industry, preventing some countries from obtaining competitive advantagesaccording to CBS News.
Tom Narayan, principal analysis of Variable Income in RBC Capital Marketshe affirmed to CBS News that prolonged rates would damage US companies and favor Korean and Japanese companies. James Picariello, senior automotive analyst at BNP Paribas Exanehe added that these measures could reduce vehicle sales and generate problems affordability In the sector.
However, Picariello considered that tariffs could bring back up to a quarter of the vehicle production to the United States without the need to build new plants, since the production capacity Current is 55%. This would allow to relocate approximately one million units, which could be presented as a achievement by the Trump administration, according to CBS News.
