President Trump has proposed a 25% tariff on auto imports from Canada and Mexico, set to begin on February 1. While the idea aims to boost U.S. manufacturing, experts warn it could raise car prices and disrupt the automotive industry.
Many cars and parts used in the U.S. are made in Mexico or Canada. Automakers like Ford and General Motors rely on cross-border supply chains that ensure smooth production. A steep tariff would make it costly to maintain these operations, potentially forcing companies to pass costs to consumers. This could mean higher car prices and fewer sales.
Hildegard Müller, president of Germany’s VDA auto association, highlighted concerns over inflation, noting that higher tariffs would increase costs for buyers. Automakers worldwide, including Volkswagen, BMW, and Toyota, fear the ripple effects on jobs and investments.
Although Trump’s tariffs are aimed at bringing jobs back to the U.S., experts say they could backfire, with automakers cutting jobs to balance reduced sales. “Ultimately, higher prices mean fewer buyers,” said Simon Geale, a supply chain expert.
As the industry waits for clarity, the proposed tariffs could challenge automakers, consumers, and supply chains alike, potentially reshaping the global auto market.
