President Donald Trump is making big car companies worry. He has talked about putting a 25% tax on cars and parts coming from Mexico and Canada. This could make cars more expensive for American buyers. Even though he said he would decide this week, he pushed his decision back by a month after talking to leaders from those countries.
If these taxes happen, car companies could lose a lot of money quickly. For example, experts say these tariffs could cost over $110 million every day, adding up to $40 billion in a year. Car makers like Stellantis, General Motors (GM), and Ford rely a lot on factories in Mexico and Canada. Stellantis makes 39% of its cars in these countries, GM makes 36%, and Ford, 18%. Most of these cars are sold in the U.S. Volkswagen also does a lot of its work in Mexico.
Because many American cars use parts from Mexico and Canada, the taxes could affect almost all vehicles. Some suppliers are already charging extra to prepare for the change, and they say car buyers will end up paying more.
Trump’s goal for these tariffs is to get Canada and Mexico to help with issues like illegal immigration and drug trafficking, while also trying to fix trade problems.
Focus on GM Trucks
General Motors’ pickup trucks are an example of how the U.S., Canada, and Mexico work together economically. GM’s Chevrolet Silverado and GMC Sierra trucks are made in multiple factories—some in the U.S. and others in Mexico and Canada. In fact, last year over half of the GM pickups sold in the U.S. came from these plants.
GM has told its workers that production will continue normally. Even trucks made in the U.S. need many parts from Mexico and Canada. For instance, some parts for engines and transmissions come from Canada, while Mexico supplies wire harnesses.
Though GM can move some truck-making to the U.S., they say they don’t have enough space to move everything. A union leader from a GM plant in Indiana believes workers will soon be asked to make more trucks.
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