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Looming Mexico Tariffs Make Auto Companies Uneasy

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June 5, 2019—President Donald Trump threatened a 5-percent tariff on all goods coming from Mexico, which would ramp up to 25 percent by October if enacted.

The New York Times reported that the tariffs could be enacted as soon as next week.

That could hit automakers hard. General Motors, for example, is the largest player in Mexico. The company has 14 manufacturing sites and produces hundreds of thousands of vehicles there, reported Automotive News.

GM imports 13 percent of its vehicles from Mexico, CNBC reported. Fiat Chrysler and Ford import 18 percent and 17 percent, respectively.

Japanese automakers Toyota, Honda, Nissan and Mazda all have plants in Mexico as well, AN reported. In total, vehicles and auto parts represented $93.3 billion in imports in 2018.

Auto parts suppliers are also poised to suffer from the tariffs. Detroit Free Press auto industry reporter Phoebe Wall Howard Tweeted that companies like Aptiv, Delphi, Lear and Visteon derive up to 37 percent of their global revenue from Mexico. She cited a Deutsche Bank analyst.

"The unknown factor is the impact on suppliers, as components can move back and forth between Mexico, the United States and Canada up to 20 times before they make their way into assembled cars,” said Macuarie Securities analyst Janet Lewis in the AN story.

She said that automakers are almost certain to pass additional costs on to the consumer.

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