A trade war between the three countries could eventually injure American consumers
<!–
–>
by Brad Anderson
February 3, 2025 at 08:31
–>
–>
- About 22% of all new cars sold in the United States last year were produced in Mexico or Canada.
- From February 4, Canadian and Mexican imports will be affected by heavy prices of 25%.
- Some brands are already planning to move production in the United States.
President Donald Trump’s prices against Canada, Mexico and China could cost the 33 billion dollar American cars industry, analysts said. Low -income consumers should feel the weight of these prices and a trade war has the potential to increase prices and increase the cost of living.
From February 4, imports from Canada and Mexico will be struck with prices of 25%, while goods imported from China will be slapped with a price of 10%. The impact of these prices on the automotive industry will be important. About 27% of all of Mexico imports between January and November 2024 were cars and car parts, while 12% of Canadian imports were cars and parts.
Read: China, Canada and Mexico are struck by Trump prices, triggering a new trade war
Anindya DAS of Nomura Securities suggested that the prices between the three countries will lower operating profits in the United States by $ 33 billion. No less than 22% of all new vehicles sold in the United States last year were produced in Mexico or Canada.
According to Nikkei Asia, around 27% of all Nissan models sold in the United States come from Mexico and around 13% of Hondas sold across the country are imported to the southern border. However, not just cars abroad will be affected by prices.
The United States imports around 60% of all of its oil from Canada. In addition, the Far North White represented around 40% of minerals and metals imported in the United States per value in 2023.
“Prices, such as a consumption tax, are regressive, therefore their impact is heavier on low -income consumers,” said Mitsui & Co USA Sayu Ueno president.
Some foreign car manufacturers are already planning to move more production in the United States to avoid prices. According to a recent Germany report, Porsche and Audi can move production in the United States. The two car manufacturers plan to potentially build their models in VW installations in Chattanooga, Tennessee, which currently builds the Atlas and the ID.4. There is also a chance that Audi can build cars at the South Carolina factory which is currently under construction for the Scout brand.
