While Mexico and Canada have obtained a one -month postponement from the Trump administration’s tariff by 25 %, American auto and manufacturing companies are still ready, pending more developments in the trade conflict between the three countries.
Given the deep integration of the automotive supply chain in the United States with its northern and southern neighbors, any increase in customs tariffs after stopping will come at a large cost.
General Motors, the largest American car manufacturer, produces 40 % of its cars in Mexico and Canada. According to the Cato Institute, the Mexican General Motors factories exported more than 700,000 cars to the United States last year. Ford is less exposed. Only 358,000 of its cars came from Mexico in 2024. Stelantis–Chrysler, Dodge, Jeep, and RAM–Followed by 314,000 vehicles. Their major foreign counterparts, Toyota, Honda and Volkswagen, are largely investing in North America and will also suffer.
Bernstein Research calculates that the customs tariff by 25 % would worship the automotive industry with additional fees daily at a value of $ 110 million; Jefferies, the investment bank, estimates that the tariffs will add 2700 dollars to the average price of the car. Retirement prices rise, which motivates consumers to buy less.
“The auto industry in North America is very integrated, and the imposition of customs tariffs will be harmful to American jobs, investment and consumers,” says Jennifer Savavian, CEO of Autos Drive, a lobby that represents foreign car makers.
Large brands are used to assemble vehicles in the United States, Canada and Mexico. They buy basic ingredients, including engines, transportation, and simple ingredients, from the border. Some parts cross back and forth five or six times before merge them into a final vehicle. The Cato 2025 tariff study followed–An electric component in the circuit board–On her journey. It was first purchased in Colorado and shipped to Siodad Khwariz in Mexico to be included in the circuit board. The component was monitored in El Passo, Texas; Matoreus, Mexico. She finished her path in two seats manufacturers, in Arlington, Texas; Mississoga, Ontario.
