WASHINGTON (Reuters)-A commercial group that represents virtually every major automakers warned on Tuesday that new 25% tariffs on Canada and Mexico imports imposed by US President Donald Trump will lead to drastic pricing increases.
“All automakers will be affected by these tariffs over Canada and Mexico,” said John Bozzella, who directs the automotive innovation alliance, which represents all major US automakers except Tesla.
Among the entity’s members are General Motors, Ford, Toyota, Volkswagen, Hyundai and Stellantis.
“Most predict that the price of some vehicle models will increase by up to 25% and the negative impact on the price and availability of vehicles will be felt almost immediately.”
Automobile manufacturers warned that tariffs will stop the integrated supply chain throughout North America that has been in effect for over 25 years. Some automotive parts can cross a border six or more times before the final assembly.
“It is not possible to relocate automotive production and the supply chain overnight. This is the challenge and the dilemma: Automotive tariffs in North America may end up increasing costs for consumers before jobs return to the country, ”added Bozzella.
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Last month, Ford CEO Jim Farley warned that 25% tariffs over Mexico and Canada would “open a hole” in the US automotive sector. “What we are seeing is very cost, a lot of chaos,” he said last month.
United Auto Workers praised Trump, highlighting the plans for new tariff measures in April.
“We are pleased to see a US president take aggressive measures to end the free trade disaster that has fallen like a bomb over the working class,” the union said. “We look forward to working with the White House to shape automotive tariffs in April to benefit the working class.”
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The US International Association of Automobile Dealer has observed that dealers already face the increase in vehicle and parts prices and high interest rates. “Tariffs could contribute directly to thousands of dollars more in label prices,” the group said.
