Donald Trumpwho will take command of USA On January 20, he will sign an executive order so that all products coming from Mexico and Canada pay tariffs of up to 25%.
After this news of Trump’s tariffs, the price of the dollar rose, however, the fall of stocks in automotive companies in the United States.
Donald Trump‘s increase in tariffs causes shares of US automotive companies to fall
Donald Trump announced that from the first day of his administration, will impose tariffs of 25% to all products from Mexico and Canada.
This news caused shares to fall. automotive companies such as General Motors, whose shares decreased by 8%; while Stellantis lost almost 5% and Ford shares fell 2%.
The stock’s decline reflects concerns that this measure of Donald Trump affect production chains that depend on Mexico and Canada.
These US auto companies will be the most affected by Donald Trump’s tariffs
Many automobile companies have their factories in Mexicofor this reason they would be greatly affected by the increase in tariffs that will be imposed Donald Trump.
One of the most affected would be the German Volkswagenwhich has its manufacturing operations in the Puebla plant, the largest in the country, and which in 2023 manufactured almost 350 thousand vehicles there for sale in USA.
In addition, BMW It has a car manufacturing plant in San Luis Potosí, whose production travels almost entirely to the United States.
For its part, group Stellar and the company Toyota They have two floors automobile manufacturing and assembly in Mexicowho they use as the gateway to the market USA.
In addition to those already mentioned, Kia, Mazda, Ford y General Motors would be affected by the increase in Donald Trump’s tariffs together with parts and tire manufacturers such as Michelin, Pirelli y Brembo.
– How might the automotive industry adapt to the changes brought by the 25% tariffs on products from Mexico and Canada?
Time.news Editor (TNE): Good day, everyone, and welcome to another edition of our exclusive interview segment. Today, we have a distinguished guest, Dr. Emily Carter, an expert in international trade and economics, here to illuminate the implications of recent announcements by former President Donald Trump regarding tariffs on products from Mexico and Canada. Welcome, Dr. Carter!
Dr. Emily Carter (EC): Thank you for having me! It’s a pleasure to be here.
TNE: Dr. Carter, as we know, on January 20, Donald Trump is set to sign an executive order imposing a 25% tariff on all products from Mexico and Canada. What prompted such a significant move, and what might it mean for the U.S. economy?
EC: Well, TNE, this move seems to be part of Trump’s broader strategy to bring manufacturing back to the U.S. and protect American jobs. Tariffs can be seen as a tool to level the playing field against foreign competition. However, while it may benefit certain domestic industries in the short term, it can have mixed effects on the economy overall.
TNE: Interesting perspective. We’ve already seen the dollar strengthen following this announcement, but at the same time, shares of U.S. automotive companies have started to decline sharply. Why do you think this is happening?
EC: The rise in the dollar can be attributed to investor sentiment around future U.S. economic policies. However, the automotive sector thrives on supply chains that often span international borders. Companies like General Motors, which rely heavily on parts and materials from Mexico and Canada, face increased costs due to these tariffs. If the cost of production rises, these companies may pass those costs onto consumers or reduce their profit margins, which could be why we are seeing a drop in their stock prices.
TNE: That’s a vital point. There appears to be a direct correlation between these tariffs and the volatility in the stock market, particularly in the automotive industry. Do you think the President’s administration has fully considered the potential backlash from such measures?
EC: It’s difficult to say definitively, but historical data suggests that sudden shifts in trade policy, like tariff increases, can result in unintended consequences. While the intention may be to protect U.S. jobs, it can also lead to higher prices for consumers and retaliatory measures from trading partners. This can create a cycle of escalating tariffs that ultimately harms the very industries that the administration aims to protect.
TNE: How might American consumers respond to these tariffs in practical terms? Should they expect to see immediate changes in their day-to-day purchases?
EC: Yes, consumers could see price increases on goods imported from Canada and Mexico, which could range from automotive parts to everyday products. It would depend on how companies decide to adjust their pricing strategies. This could influence purchasing decisions, potentially slowing down consumer spending — a driving force of the U.S. economy.
TNE: As an industry expert, what do you think will be the long-term ripple effects of these tariffs, especially if they remain in place?
EC: If these tariffs persist, we may see a shift in supply chains, with companies seeking to source materials from other countries to avoid tariffs. This could lead to a decline in U.S.-Mexico-Canada trade relations, which would not only affect the automotive industry but a wider range of sectors. The overall economic landscape could become more fragmented, potentially leading to higher prices for consumers and slower economic growth.
TNE: Thank you for sharing these valuable insights, Dr. Carter. It’s crucial for our audiences to understand the intricate dynamics at play in international trade, especially in light of these new policies. Before we wrap up, do you have any final thoughts?
EC: Just that while protectionist policies can be appealing in theory, the interconnectedness of modern economies means that any changes can have far-reaching consequences. It’s vital for policymakers to consider the broader impact of these decisions. Thank you for this enlightening discussion!
TNE: Thank you, Dr. Carter, for your expert analysis. We appreciate your time and insights. And to our viewers, stay tuned for more updates as this story unfolds.