"Major auto-exporting nations are in crisis mode after President Trump announced new 25% tariffs on imported cars and auto parts, starting April 3, that will hit popular brands from Toyota to Porsche.
Nearly half of new passenger vehicles sold in the U.S. in 2024 were assembled outside the U.S., according to data from S&P Global Mobility. Most come from five nations: Mexico, Japan, South Korea, Canada and Germany.
Cars drive the economies of these nations and typically account for a big proportion of exports.
U.S. auto tariffs could reduce economic growth in Japan by 0.2 percentage point, said Takahide Kiuchi, executive economist at Nomura Research Institute. If Japanese carmakers shift production to the U.S., they would maintain sales but "it would be a headwind for the Japanese economy," he said.
The automotive industry is also a linchpin of the European economy, accounting for 7% of the European Union's economic output. For Germany, auto exports to the U.S. account for close to half a percent of value added in the economy, according to Capital Economics.
More than a dozen global automakers operate close to 40 plants in Mexico, including General Motors, Mercedes-Benz, BMW, Hyundai and Toyota. The country exported almost three million vehicles to the U.S. and supplied 40% of U.S. auto parts last year. Close to two million Mexicans work in the vehicle and auto-parts industries, with exports last year close to $200 billion.
Brian Kingston, the head of the Canadian Vehicle Manufacturers' Association, said there has been more than $280 billion of investment in the North American auto industry since 2020, most of which was in the U.S. and all of which was done under the U.S.-Mexico-Canada Agreement that Trump signed in 2018. Canada's auto sector employs more than 125,000 people and produced roughly 1.3 million cars last year, most of which were exported to the U.S.
Many non-U.S. automakers get a quarter or more of their sales in the U.S.
Trump said he wanted the carmakers to move their production to the U.S.
Hyundai said at the White House on Monday that it would invest an additional $21 billion in U.S.-based car manufacturing and supply chains for critical materials.
German luxury brands Mercedes-Benz and BMW have developed manufacturing bases for SUVs in the U.S. in recent decades, but they continue to ship sedans across the Atlantic as well as engines and transmissions for the SUVs.
All the vehicles sold in the U.S. by Audi and Porsche, both owned by Volkswagen, are imported.
Honda's exports to the U.S. include the made-in-Canada CR-V and Civic and Mexico-produced HR-V. Hyundai's exports include the hybrid Tucson and Palisade SUV.
South Korea said it planned emergency support for the auto industry. Japan said it would ask Trump for a tariff exemption, and Prime Minister Shigeru Ishiba said retaliation was an option.
In Brussels, European Commission President Ursula von der Leyen condemned the tariffs as "bad for businesses, worse for consumers," while saying the EU would seek negotiated solutions.
In Mexico, the government plans to step up efforts to obtain preferential tariff treatment from the U.S., particularly in the automotive sector where both countries are highly integrated.
One Canadian government official said that Commerce Secretary Howard Lutnick reached out to Doug Ford, the leader of the province of Ontario, and suggested that Canada could get a break on the tariffs that Trump announced on Wednesday." [1]
1. U.S. News: Auto-Exporting Nations Face a Hit. Kubota, Yoko; Wilmot, Stephen; Kim, Soobin. Wall Street Journal, Eastern edition; New York, N.Y.. 28 Mar 2025: A2.
Komentarų nėra:
Rašyti komentarą