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**Hugh** · 02-02-2025, 12:09

Quote:

Originally Posted by 1andrew1

Larger US car manufacturers are very dependent on parts from Canada and Mexico (and vice versa).They and consumers will feel this extra tax soon as supply chains can't be changed overnight.

Good article on this (and other impacts) in today’s Washington Post

https://wapo.st/4aICBfu

Quote:

More than half of goods classified as automotive vehicles, parts and engines come from Canada and Mexico. Canada was also the main exporter of industrial supplies to the United States, including building supplies, oil and metal materials used to manufacture other products.

Cars are often made between the United States and its closest neighbors, and parts go back and forth across the border during the manufacturing process.

“There’s no such thing as an American-made car. We have an integrated North American supply chain,” Brusuelas said.

About $173 billion worth of automotive vehicles, parts and engines came from Mexico alone last year.

The proposed tariffs will make it more attractive to manufacture and assemble cars in the United States, said Erik Gordon, a clinical assistant professor of entrepreneurial studies at University of Michigan. He expects car companies might have to readjust their strategy, perhaps making versions of cars with fewer bells and whistles to keep costs under control.

Many other industries also rely on parts and materials made internationally, even if the final product is made in the United States — for example, the country imported $93 billion worth of crude oil from Canada last year.

“There are very few things you could pull apart and say it’s made 100 percent in the U.S.A.,” said KPMG chief economist Diane Swonk.