{"id":161183,"date":"2025-01-27T02:40:41","date_gmt":"2025-01-27T02:40:41","guid":{"rendered":"http:\/\/www.spglobal.com\/mobility\/en\/research-analysis\/trump-automotive-tariffs-impact-automakers-suppliers.html"},"modified":"2025-01-27T02:40:41","modified_gmt":"2025-01-27T02:40:41","slug":"trumps-automotive-tariffs-would-impact-nearly-all-oems","status":"publish","type":"post","link":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/2025\/01\/27\/trumps-automotive-tariffs-would-impact-nearly-all-oems\/","title":{"rendered":"Trump\u2019s automotive tariffs would impact nearly all OEMs"},"content":{"rendered":"<h2 >Highlights<\/h2>\n<ul >\n<li>Potential 25% tariff on all goods from Canada, Mexico into the<br \/>\nUS<\/li>\n<li>Virtually all automakers and suppliers would be impacted<\/li>\n<li>Potential for spring 2025 implementation<\/li>\n<\/ul>\n<h2 >Introduction<\/h2>\n<p >US President Donald Trump is assessing a 25% tariff on all goods<br \/>\nfrom Canada and Mexico. While this would impact all industries,<br \/>\nS&amp;amp;P Global Mobility looks at the specific impact of Trump&#39;s<br \/>\nautomotive tariffs on vehicle assembly.<\/p>\n<p >President Trump has said the tariff could be applied as soon as<br \/>\nFeb 1, 2025, though this timeline seems unlikely. At time of<br \/>\nwriting, the latest intelligence suggests a more measured approach<br \/>\nmay still win out, though tariffs could be applied by spring<br \/>\n2025.<\/p>\n<p >Regardless of timing, these blanket tariffs would have a massive<br \/>\nimpact on the auto industry. It is also likely that Canada and<br \/>\nMexico will reciprocate through an equal or &#39;representative&#39;<br \/>\ntariff. Though there is no indication of what that retaliation<br \/>\nmight look like at this time, we could see another degree of<br \/>\ncomplexity if these countries imposed their own tariffs on<br \/>\nautomotive components imported from the US and used in Canadian or<br \/>\nMexican assembly.<\/p>\n<p >From a trade perspective, the move is likely to bring early<br \/>\nchanges to the USMCA trade agreement &#8211; and make those changes more<br \/>\nfavorable to the US. The USMCA trade agreement is due for review in<br \/>\nJuly 2026.<\/p>\n<p >There are approximately 5.3m light vehicles built in Canada and<br \/>\nMexico, with about 70% of these destined for the US. Further, many<br \/>\nUS-built vehicles use Canadian or Mexican-sourced propulsion<br \/>\nsystems and component sets; those components would see a tariff as<br \/>\nwell, increasing costs for vehicles produced in the US. Virtually<br \/>\nno OEM or supplier operating under the USMCA is immune.<\/p>\n<p ><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/cdn.ihsmarkit.com\/www\/images\/0125\/sp-na-production-by-oem-1200_300120251945117.jpg\" alt=\"North American Production by OEM\" width=\"1000\" height=\"563\" \/><\/p>\n<h2 ><strong>US<\/strong> automotive <strong>tariffs: Current<br \/>\nsituation<\/strong><\/h2>\n<p >The current tariff-free structure stems from successive trade<br \/>\nagreements starting in 1965 with Canada and including Mexico in<br \/>\n1994 with NAFTA, which evolved into USMCA in 2020. Free trade has<br \/>\ncreated a streamlined production ecosystem among the three<br \/>\npartners. Customers and the industry benefit from zero tariffs if<br \/>\nspecific North American value-add criteria are met. For decades, a<br \/>\nlargely stable environment has enabled a trading ecosystem to<br \/>\nevolve.<\/p>\n<p >In 2024, the US imported some 3.6m light vehicles from Canada<br \/>\nand Mexico, representing 22% of all vehicles sold in the US. Mexico<br \/>\nis currently the largest source of US light-vehicle imports,<br \/>\npassing Japan, South Korea and all of Europe.<\/p>\n<p >Vehicle production in Mexico and Canada has been a significant<br \/>\npart of sourcing strategies for several automakers for decades.<br \/>\nFord and GM have been producing vehicles in Canada and Mexico for<br \/>\naround 100 years, Volkswagen has been producing vehicles in Mexico<br \/>\nsince 1967 and Nissan since 1992. Toyota and Honda have also been<br \/>\nproducing vehicles in Canada since the mid-1980s, each opening<br \/>\nplants in Mexico this century.<\/p>\n<p >Automakers and suppliers produce components throughout the<br \/>\nregion, with engines among the higher cost-impact items. Over the<br \/>\nyears, production in Canada has waned while production in Mexico<br \/>\nhas increased, though both are significant in the ecosystem.<br \/>\nRegardless of automaker, in 2024, S&amp;amp;P Global Mobility estimates<br \/>\nthat about 54% of US light-vehicle sales were produced in the US,<br \/>\n15% in Mexico and just under 7% from Canada.<\/p>\n<p >The automakers with the longest history of vehicle production in<br \/>\nMexico also see that capacity more deeply integrated. Mexico is an<br \/>\nattractive sourcing option for Detroit-based OEMs, as well as for<br \/>\nVolkswagen. In 2024, about 23% of Stellantis sales were sourced<br \/>\nfrom Mexico, while GM sourced 22% and Ford just under 15%.<\/p>\n<p >Beyond the D3, Nissan sources about 27% of its US sales from<br \/>\nMexico, Honda nearly 13%, and Toyota and Hyundai at 8% each.<br \/>\nVolkswagen is the most exposed to tariff risk, with over 43% of its<br \/>\nUS sales sourced from Mexico.<\/p>\n<h2 ><strong>A 25%<\/strong> tariff <strong>scenario<\/strong><\/h2>\n<p >Here we presume the US introduces a 25% tariff on Canadian and<br \/>\nMexican value add, though timing is uncertain. All vehicles and<br \/>\ncomponents moving from Canada or Mexico to the US would face this<br \/>\ntariff on value added outside the US.<\/p>\n<p >Canada and Mexico are likely to implement tariffs in response.<br \/>\nIn this scenario, tariffs apply only to the manufactured value of<br \/>\nthe component or vehicle added outside the US, not the final<br \/>\ncustomer-facing MSRP.<\/p>\n<p >A 25% duty on the average $25,000 landed cost of a vehicle from<br \/>\nMexico and Canada would add $6,250. Importers are likely to pass<br \/>\nmost, if not all, of this increase to consumers. With average<br \/>\nvehicle prices near all-time highs, this additional tariff would<br \/>\nput further strain on affordability.<\/p>\n<p >If components and parts are also subject to the 25% tariff,<br \/>\nvehicles produced in the US with any components sourced from Canada<br \/>\nor Mexico would also see costs rise by 25%. Given the free flow of<br \/>\ncomponents across borders, the tariff would impact most vehicles<br \/>\nproduced in the US as well.<\/p>\n<h2 ><strong>Impact on<\/strong> automaker<br \/>\n<strong>production<\/strong><\/h2>\n<p >S&amp;amp;P Global Mobility sees automaker exposure in three broad<br \/>\nlevels. Vehicles produced in the US with US-sourced powertrains and<br \/>\npropulsion systems (among the most expensive components) will have<br \/>\nthe least exposure, clearly.<\/p>\n<p >Vehicles built in the US will have another level of exposure;<br \/>\nexamples here include the Ford F-Series pick-ups and Mustang cars<br \/>\nwith engines from Canada, as well as the Mazda CX-50 which sources<br \/>\nengines from Mexico.<\/p>\n<p >Vehicles at significant exposure risk are those built in Canada<br \/>\nor Mexico, particularly high-volume products where automakers have<br \/>\nlittle opportunity for re-sourcing. Among the vehicles in that<br \/>\ncategory are full-size pick-up trucks from GM and Stellantis, as<br \/>\nwell as the Toyota RAV4.<\/p>\n<h2 ><strong>Impact on<\/strong> automotive<br \/>\n<strong>suppliers<\/strong><\/h2>\n<p >Supplier impact can also be significant, and this will increase<br \/>\nvehicle prices to consumers in indirect, nontransparent ways. We<br \/>\ncould see automakers pull back production on tariffed vehicles;<br \/>\nsimilar to the reaction to the semiconductor shortage and other<br \/>\nCovid-related supply chain shortages, some automakers could slow<br \/>\nproduction until sales are lost due to lack of product. Reducing<br \/>\nproduction affects supplier sales and contracts.<\/p>\n<p >OEMs may serve as the main support for tariff exposure since<br \/>\nmany smaller tier 1 and tier 2 suppliers lack the capital to cover<br \/>\nongoing tariffs without help from their customers. Some suppliers<br \/>\nmay invoke Force Majeure, refusing to supply parts if they are not<br \/>\nquickly compensated for tariff costs.<\/p>\n<p >However, many OEM tier 1 supplier contracts likely follow<br \/>\nex-works or free carrier (FCA) incoterms, where parts are delivered<br \/>\nto a local site and the OEM pays duties to export the supplier&#39;s<br \/>\nparts to the final assembly location. In that case, force majeure<br \/>\nwould not apply and automakers would need to pay the tariff.<br \/>\nConsequently, the impact is more likely to affect smaller suppliers<br \/>\nworking with Tier 1s<\/p>\n<h2 >Summary<\/h2>\n<p >A tariff against Canada and Mexico could significantly disrupt<br \/>\nthe economics of the region, even if lower than the 25% being<br \/>\nconsidered. Among the open questions will be how long the tariff<br \/>\nmight be in play; given the justification is related to immigration<br \/>\nand stopping the flow of illegal drugs, what metrics will be in<br \/>\nplace for Canada and Mexico to meet to see the tariff lifted<br \/>\nagain?<\/p>\n<p >Our assumptions remain true whether the tariff is enacted on<br \/>\nFebruary 1 or later. It is also possible that the tariff is tabled<br \/>\nand worked into a larger renegotiation of the USMCA free trade<br \/>\nagreement. However, some level of tariff being deployed against<br \/>\nCanada and Mexico seems to inch closer toward reality.<\/p>\n<p ><em>A full-length analysis is available to <a href=\"https:\/\/connect.ihsmarkit.com\/automotive\/AutoInsight\/dashboard\/home\"><br \/>\nAutoInsight<\/a>, <a href=\"https:\/\/connect.ihsmarkit.com\/automotive\/AutoIntelligence\/dashboard\/home\"><br \/>\nAutoIntelligence<\/a> and <a href=\"https:\/\/autotechinsight.ihsmarkit.com\/users\/welcome\">AutoTech<br \/>\nInsight<\/a> customers through the respective web portals<\/em><\/p>\n\n<h2><b>Commercials Cooperation Advertisements:<\/b><\/h2>\r\n<p><br>(1) IT Teacher IT Freelance<br> <\/p>\r\n<a href=https:\/\/itteacheritfreelance.hk\/wordpress><img src=http:\/\/gamefootballmobileanimeiphone.com\/wp-content\/uploads\/2023\/09\/ITTeacherITFreelance-Website.png alt=IT\u96fb\u8166\u88dc\u7fd2 java\u88dc\u7fd2 \u70ba\u5927\u5bb6\u914d\u5c0d\u96fb\u8166\u88dc\u7fd2,IT freelance, \u79c1\u4eba\u8001\u5e2b, 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right away. <br><br>Email (Prefer using email to contact us): <br>SalesExecutive@ITSec.vip<\/p>","protected":false},"excerpt":{"rendered":"<p>HighlightsPotential 25% tariff on all goods from Canada, Mexico into the<br \/>\nUSVirtually all automakers and suppliers would be impactedPotential for spring 2025 implementationIntroductionUS President Donald Trump is assessing a 25% tariff on all goods<br \/>\nfrom&#8230;<\/p>\n","protected":false},"author":479,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-container-style":"default","site-container-layout":"default","site-sidebar-layout":"default","disable-article-header":"default","disable-site-header":"default","disable-site-footer":"default","disable-content-area-spacing":"default","footnotes":""},"categories":[3267],"tags":[61,122,127,129,124,128,125,132,131,133,126,130,123,66,94,88,97,56,64,65,60,3344,3351,3357,3360,3335,3340,3362,112,3353,40,75,95,3350,3352,3356,3343,3359,3339,3345,3334,3341,104,3354,33,120,3358,3349,3337,3348,105,101,98,115,30,29,41,86,3342,3361,70,69,68,72,71,26,118,108,87,3355,46,55,48,52,54,51,50,83,3338,62,58,57,3336,109,35,3346,59,63,85,79,82,96,80,27,81,114,44,42,43,45,38,39,110,117,100,111,116,3300,73,89,90,92,91,93,84,78,37,102,34,36,77,67,74,99,113,3347,119,28,121,32,47,49,53,103,31,76],"class_list":["post-161183","post","type-post","status-publish","format-standard","hentry","category-car-or-automobile","tag-airpods","tag-anime","tag-anime-characters","tag-anime-cosplay","tag-anime-edits","tag-anime-merchandise","tag-anime-movies","tag-anime-news","tag-anime-recommendations","tag-anime-reviews","tag-anime-series","tag-anime-streaming","tag-animes","tag-app-store","tag-app-store-samsung","tag-appgallery","tag-appgallery-oneplus","tag-apple","tag-apple-music","tag-apple-tv","tag-apple-watch","tag-auto-financing-guide","tag-automobile-industry-news","tag-automobile-laws-and-regulations","tag-automobile-shows-and-expos","tag-automobile-specifications","tag-automobile-technology","tag-autonomous-vehicles","tag-bbc-sport","tag-best-cars-for-long-drives","tag-best-mobile-games","tag-bixby","tag-bixby-xiaomi","tag-car-accessories","tag-car-comparison","tag-car-customization-ideas","tag-car-insurance-advice","tag-car-interior-design-ideas","tag-car-maintenance-tips","tag-car-resale-value","tag-car-reviews","tag-car-safety-features","tag-champions-league","tag-city-cars","tag-cyberpunk","tag-cyberpunk-2077","tag-driving-tips-and-tricks","tag-eco-friendly-cars","tag-electric-vehicles","tag-family-cars","tag-fantasy-football","tag-fifa","tag-football","tag-formula-1","tag-fortnite","tag-free-fire","tag-free-mobile-games","tag-freebuds-pro","tag-fuel-efficiency-tips","tag-future-of-automobiles","tag-galaxy-a52","tag-galaxy-note-20","tag-galaxy-s21","tag-galaxy-watch-4","tag-galaxy-z-fold-3","tag-game","tag-games","tag-golf","tag-harmonyos","tag-highway-cars","tag-how-to-backup-iphone","tag-how-to-factory-reset-iphone","tag-how-to-reset-iphone","tag-how-to-restore-iphone","tag-how-to-unlock-iphone","tag-how-to-unlock-iphone-5","tag-how-to-unlock-iphone-6","tag-huawei","tag-hybrid-cars","tag-ios","tag-ipad","tag-iphone","tag-latest-car-models","tag-live-soccer","tag-lol","tag-luxury-cars","tag-macbook","tag-macos","tag-mate-40-pro","tag-mi-11-lite","tag-mi-home-security-camera-basic-1080p","tag-mi-home-security-camera-basic-1080p-huawei","tag-mi-smart-band-6","tag-minecraft","tag-miui","tag-mlb-scores","tag-mobile-game-design","tag-mobile-game-development","tag-mobile-game-marketing","tag-mobile-game-monetization","tag-mobile-games","tag-mobile-gaming","tag-nba-scores","tag-nba-standings","tag-nfl","tag-nfl-scores","tag-nhl-scores","tag-off-road-vehicles","tag-one-ui","tag-oneplus","tag-oneplus-9-pro","tag-oneplus-buds-pro","tag-oneplus-nord-ce-5g","tag-oxygenos","tag-p40-pro-plus","tag-poco-x3-pro","tag-pokemon","tag-premier-league","tag-pubg","tag-pubg-mobile","tag-redmi-note-10-pro","tag-samsung","tag-samsung-pay","tag-soccer","tag-sports","tag-sports-cars","tag-steam","tag-steeam","tag-top-10-anime","tag-valorant","tag-when-do-the-iphone-7-come-out","tag-when-does-the-iphone-7-come-out","tag-when-is-the-iphone-7-coming-out","tag-world-cup","tag-xbox-series-x","tag-xiaomi"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/posts\/161183","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/users\/479"}],"replies":[{"embeddable":true,"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/comments?post=161183"}],"version-history":[{"count":1,"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/posts\/161183\/revisions"}],"predecessor-version":[{"id":161184,"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/posts\/161183\/revisions\/161184"}],"wp:attachment":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