President-elect Donald J. Trump’s threat to impose 25 percent tariffs on goods from Mexico and Canada sent shivers on Tuesday through the auto industry, which depends heavily on both countries for parts and manufacturing.
The prospect of tariffs “is a two-alarm fire for the auto industry,” said Patrick Anderson, chief executive of Anderson Economic Group, a consulting firm in Michigan. “There is probably not a single assembly plant in Michigan, Ohio, Illinois and Texas that would not immediately be affected by a 25 percent tariff.”
The list of popular vehicles made in Mexico or Canada is long. It includes Ram pickups made by Stellantis in Saltillo, Mexico, and Chrysler minivans built in Windsor, Ontario. General Motors makes Chevrolet Silverado pickups and electric versions of Equinox and Blazer S.U.V.s in Mexico, where Ford Motor also makes its Maverick pickup.
All of those vehicles and many others would become significantly more expensive if Mr. Trump, who won Michigan with promises to preserve auto jobs, followed through on his threat, economists said. Those higher auto prices would have a significant effect on overall inflation. And higher car prices would probably lead to lower sales and layoffs at auto factories.
“In his first term, President Trump instituted tariffs against China that created jobs, spurred investment and resulted in no inflation,” Karoline Leavitt, spokeswoman for the Trump-Vance Transition, said in an email. Once in office, she said, he will work to bring jobs back to the United States by “raising real wages, lowering taxes, cutting regulations and unshackling American energy.”
The prospect of disruptive tariffs hits the industry at a perilous moment. Virtually all automakers are struggling with sagging consumer demand, a growing preference for hybrids and electric cars, and the emergence of Chinese automakers like BYD that are pushing into markets once dominated by Japanese, American and European companies.
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