03.02.2025 10:57
The new tariffs imposed by U.S. President Donald Trump have dealt a significant blow to the automotive industry. Due to the new taxes, car prices have increased by an average of $3,000, while suppliers are experiencing fears of shutdowns. Production centers are warning about thousands of job losses.
The 25% tariff imposed by U.S. President Donald Trump on Canada and Mexico will significantly impact automobile production in North America. This new regulation, which affects an import market of approximately $225 billion, will bring an additional annual cost of $60 billion to the sector. A large portion of this cost will be passed directly to consumers.
CRITICAL WARNINGS FROM INDUSTRY LEADERS AND EXPERTS
Flavio Volpe, President of the Canadian Automotive Parts Manufacturers Association, stated, "The automotive sector will shut down within a week. No one in the sector can operate profitably with a 25% rate." Wolfe Research analysts noted that the price of a new car could increase by $3,000, making already high vehicle prices even more inaccessible.
PRODUCTION AND EMPLOYMENT UNDER THREAT
Thousands of job losses are expected in regions with production centers, such as Windsor, Ontario, and Detroit. John D'Agnolo, who represents workers at Ford Motor Co.'s Windsor plant, said, "Such job losses would turn Windsor into a ghost town." Ontario Premier Doug Ford also warned that more than 500,000 people could lose their jobs in his province alone.
URGENT MEASURES FROM COMPANIES
Automakers have begun taking measures against the new tariffs. General Motors (GM) announced that it has reduced its inventory in Canada and Mexico and accelerated vehicle shipments in anticipation of tariffs. GM CEO Mary Barra stated, "While many of these actions are low-cost, we will not make significant investments without clarity."
RETALIATION ON THE WAY: NEW TAXES FROM CANADA AND MEXICO
In addition to Trump's complaints about immigration and drug trafficking, concerns about the U.S. purchasing cheap goods from China through Mexico were also among the reasons triggering the tariffs. However, Mexico and Canada announced that they would retaliate against the U.S.'s new taxes. The Canadian government announced that it would impose a 25% tariff on $106 billion worth of U.S. goods.
MAJOR DISRUPTIONS EXPECTED IN THE SUPPLY CHAIN
Industry experts indicate that tariffs will negatively affect production and sales. Michael Robinet, Vice President of S&P Global Mobility, stated, "Automakers and suppliers will abandon producing high-tariff products. We expect a decline in production and sales." This situation poses a serious threat to the future of the automotive sector.