Automakers and Suppliers Face Uncertainty as Tariff Decision Looms
President Donald Trump is deciding whether to impose tariffs on goods from Canada and Mexico. A decision on the level of tariffs is expected to be announced Tuesday, potentially impacting the auto industry significantly.
Commerce Secretary Howard Lutnick stated that the United States’ proposed tariffs could take effect Tuesday. However, President Trump will determine whether they would be set at the suggested 25%.
Several major automakers and auto suppliers could be affected by the tariffs:
- BMW: Its plant in San Luis Potosi, Mexico, produces the 3 Series and 2 Series Coupe, and the M2. Nearly all of the plant’s output goes to the U.S. and markets worldwide.
- Ford Motor Co.: Operates three plants in Mexico. It exported just under 196,000 cars to North America in the first half of 2024, with 90% going to the U.S., according to Mexico’s AMIA.
- General Motors: Imported roughly 750,000 vehicles from Canada or Mexico in 2024 to the U.S., most of which were made in Mexico, according to GlobalData. These include the Chevy Silverado, GMC Sierra full-size pickups, and midsize SUVs. The Mexican plants also build two of its new EVs. GM’s three plants in Canada produce electric vans, the Chevrolet Silverado Heavy Duty truck, and the V8 engine and dual-clutch transmission.
- Honda Motor: Sends 80% of its Mexican output to the U.S. market. It previously warned it would have to consider shifting production if permanent U.S. tariffs impacted Mexican imports.
- Kia Corp.: Operates a factory in Mexico that makes its own vehicles and some Santa Fe SUVs for its affiliate Hyundai Motor for export to the United States.
- Mazda: Exported around 120,000 vehicles from Mexico to the United States in 2023, but said it may need to reconsider further investments if tariffs are imposed.
- Nissan Motor: Has two plants in Mexico where it makes the Sentra, Versa, and Kicks models for the U.S. market. It produced nearly 505,000 vehicles in Mexico in the first nine months of 2024.
- Stellantis: Operates assembly plants in Mexico making Ram pickups and vans, as well as the Jeep Compass midsize SUV. The group owns two assembly plants in Canada, one where it makes Chrysler models and another scheduled to resume output of a new Jeep model this year.
- Toyota Motor: Builds its Tacoma pickup truck at two plants in Mexico, and sold more than 230,000 of them in the U.S. in 2023, representing about 10% of its total sales in that market.
- Volkswagen: Its factory in Puebla, Mexico, made nearly 350,000 cars in 2023, including the Jetta, Tiguan, and Taos, all for export to the U.S. In Canada, Volkswagen is building a battery gigafactory in Ontario, with output to begin by 2027. Volkswagen’s Audi plant in San Jose Chiapa, Mexico, makes the Q5, employing more than 5,000 people. In the first half of 2024, nearly 40,000 vehicles were exported to the U.S., according to Mexico’s AMIA.
Auto Suppliers Also at Risk
The ripple effects of these potential tariffs extend to auto suppliers:
- Autoliv: The world’s largest maker of airbags and seat belts, employing around 15,000 people in Mexico.
- Michelin: Operates two plants in Mexico and three in Canada.
- Yanfeng Automotive Interiors: Supplies automakers including General Motors and Toyota from its plants in Mexico.
- Other part makers with plants in Mexico include Italian tire maker Pirelli, Italian premium brakes maker Brembo and Italy’s Eurogroup Laminations.
President Donald Trump is deciding whether to impose tariffs on goods from Canada and Mexico.
The auto industry, with its five-year product cycles, is not well-equipped to quickly adapt to significant changes like new tariffs.
