Trump tariffs could quickly reduce North America cars production

Detroit – Approximately one third of vehicle production in North America could be reduced next week as a result of The 25% rates of President Donald Trump In Mexico and Canada, as car manufacturers try to mitigate the increase in costs and buyers expect to buy new cars and trucks.

This lost production would be equivalent to approximately 20,000 units per day, according to a new analysis of outstanding data and the Global Mobility S&P forecast firm.

The impact of production and the possibility of layoffs would continue to grow if rates, which Trump implemented TuesdayThey do not change or get up.

“We have a new dawn, to some extent. This is a significant movement,” said Stephanie Brinley, associate director of self -intelligence at S&P Global Mobility, during a web seminar with the Automotive Press Association.

S&P Global Mobility reports that 25 car manufacturers produce 63,900 light passenger vehicles in North America per day. Most of them, approximately 65%, are assembled in the United States, followed by 27% in Mexico and 8% in Canada.

The impacted production will vary by the car manufacturer, the vehicle and the location of the plant. It could mean that a plant is completely devised or produces less than a certain vehicle that is based on pieces that can travel through borders several times.

“I think we are going to see some shift fall plants. Let’s see some plants only slow construction rates,” Brinley said. “It will not necessarily be consistent in everything (car manufacturers). It will be much of what they need and how much they need it.”

The actions of automotive actions fell more than the widest market on Tuesday as a result of rates.

A tariff is an import tax, or foreign goods, brought to the United States. Companies that import goods pay tariffs, and some experts fear that companies simply pass additional costs to consumers, which increases the cost of vehicles and potentially reduces demand.

Several car manufacturers this week refused to comment directly on 25%tariffs, trusting previous comments or trade associations to speak in their name.

The American Automotive Policy Council that represents Ford motor, General Motors and Stellantis -All of which are strongly affected by such rates, argues that vehicles and parties that meet the strict requirements of domestic and regional content of the United States Agreement-México-Canadá, or USMCA, must be exempt from the increase in the tariff.

“Our US car manufacturers, who invested billions in the US Missouri Matt, president of AAPC, in North America. A statement on Monday night.

The Alliance for Automotive Innovation, a commercial group that represents the vast majority of car manufacturers that sell vehicles in the United States, warned that not automobile manufacturers will be unscathed, resulting in a higher cost of consumers.

“This is not hypothetical. All automobile manufacturers will be affected by these rates in Canada and Mexico. The majority anticipates that the price of some vehicle models will increase, up to 25 percent, and the negative impact on the price of the vehicle and the availability of the vehicle will feel almost immediately, “said the CEO of Alliance for Automotive Innovation John Bozzella in a statement.

Nissan motor On Monday night he said: “The sustained rates of this magnitude will have a negative impact for car manufacturers, and we are evaluating how we will take measures accordingly. We hope that the sides can reach an agreement for a productive path.”

Several automotive executives and analysts of Wall Street have described tariffs such as inserting unnecessary chaos into the automotive industry.

“President Trump has spoken a lot about making our automotive industry in the United States stronger, bringing more production here, more innovation in the United States, and if his administration can achieve it, it would be one of … the most signatory achievements”, CEO of Ford. Jim Farley said last month During the Wolfe Research Investors Conference. “Until now, what we are seeing is a lot of cost and a lot of chaos.”

Tariff supporters have argued that they are a way to help level commercial disparities with countries, while potentially serve as an leverage to renegotiate USMCA, which Trump originally originated during his first mandate as president.

However, car manufacturers have been relatively on the financial impacts they expect to form such tariffs. GM Mary Barra CEO Last month he said that the car manufacturer believes that he could mitigate the short -term impacts of between 30% and 50% of the additional costs “without displaying any capital.”

It is difficult to calculate the total impact that such rates will have on the production of American vehicles. The pieces can cross between the borders of the countries several times in different shapes before settling in a vehicle.

“It is one of the most fluid situations that the automotive industry has really seen … In addition to a few years of unexpected covid situations, supply situations,” Brinley said. “The industry itself has developed to be a bit more agile than perhaps it was seven or eight years ago … but it is very uncertain.”

The automotive industry is a complex global system that thrives with certainty. S&P Global Mobility reports that there are 20,000 parts on a vehicle when its nuts and bolts are torn. The pieces can come between 50 and 120 countries

For example, the Ford F-150 is assembled exclusively in the United States, but has approximately 2,700 main invoicable pieces, which exclude many small pieces, according to Caseoft, a Benchmarking of Engineering and Consulting Company.

Those parts come from 24 different countries, according to Caseoft, based in Livonia, Michigan.