Trump’s 25% tariffs on Mexico and Canada to challenge the global auto industry
DETROIT — Tariffs announced Saturday by the Trump administration of 25% on goods from Canada and Mexico as well as an additional 10% on products from China are expected to have a profound impact on the global automotive industry.
For months, automakers have been taking a "wait-and-see" approach to the Trump administration's tariff threat. That waiting period is coming to an end and automakers will likely need to implement prior contingency plans to attempt to offset additional costs in the coming weeks and months.
Depending on the details, the tariffs on Mexico could have the greatest impact on the automotive industry, followed by Canada and then China, depending on the automaker.
"Any tariff action must be followed with a renegotiation of the [United States-Mexico-Canada Agreement], and a full review of the corporate trade regime that has devastated the American and global working class," Shawn Fain, president of the United Auto Workers Union, said in a statement.
General Motors and other major automakers did not immediately respond for comment regarding the tariffs Saturday night. Others such as Ford declined to comment, while Honda issued a broad statement: "North American auto trade is key to the success of Honda globally and we look forward to a swift resolution that provides clarity and stability throughout the region."
Most major automakers have factories in the U.S. However, they still rely heavily on imports from other countries including Mexico to meet American consumer demand.
Nearly every major automaker operating in the U.S. has at least one plant in Mexico, including the six top-selling automakers, which accounted for more than 70% of U.S. sales in 2024.
A tariff is a tax on imports, or foreign goods, brought into