CUDA
01-21-2025, 11:49 AM
With post-inauguration day reality finally setting in, the head of General Motors' Canada division is now sounding the alarm. If Trump follows through with his plan to push forward with tariffs, decades of progress could be unraveled from the delicate North American auto industry supply chain, causing vehicle prices to spike. And that means the consumer will ultimately be the one who suffers.
“It is a disruption that is in no one’s interest, especially in the U.S.,” warned GM Canada President Kristian Aquilina during an interview with Bloomberg.
Aquilina's caution is one echoed by Canadian officials who have threatened retaliatory tariffs on the U.S. should the president push forward with his threats of duty fees of up to 25% for Canada and Mexico. And should any of those retaliatory tariffs be aimed at cars and trucks, well, it could spell disaster for any vehicle assembled in the U.S., regardless of brand.
This should strike up warning signs for manufacturers who set up shop domestically during the Biden administration in order to ensure that upcoming models can qualify for the EV tax credit, something which Trump also threatened to repeal when he took office. But don't forget about the countless other foreign and domestic manufacturers who produce legacy gas-powered cars in the States, either.
Many of these brands also have factories in Canada and Mexico which build components, powertrains, or entire vehicles that are then imported into the U.S. This could mean tariffs going in and tariffs coming out. And, again, a higher price tag on a vehicle's Monroney sticker.
It's not just the U.S. that could face higher vehicle prices, either. If a vehicle is assembled in the U.S. and exported to other markets (like 60% of the SUVs produced by BMW in South Carolina), it could ultimately be more expensive due to tariffs imposed on imported goods. Canadian residents in particular will also be affected, as an estimated 50% of the vehicles sold in Canada in 2023 were imported from the U.S.
During his inaugural address, Trump said that the U.S. would collect "massive amounts" of income specifically from foreign trade through a new agency he would like to have created called the "External Revenue Service"—meaning that the federal government would collect taxes by imposing tariffs on goods flowing in and out of the U.S.
No tariff reform was signed into office through executive order on Trump's first day, but reports from Reuters and other news agencies signal that the President will direct federal agencies to evaluate trade relationships with Canada, Mexico and China in February.
“It is a disruption that is in no one’s interest, especially in the U.S.,” warned GM Canada President Kristian Aquilina during an interview with Bloomberg.
Aquilina's caution is one echoed by Canadian officials who have threatened retaliatory tariffs on the U.S. should the president push forward with his threats of duty fees of up to 25% for Canada and Mexico. And should any of those retaliatory tariffs be aimed at cars and trucks, well, it could spell disaster for any vehicle assembled in the U.S., regardless of brand.
This should strike up warning signs for manufacturers who set up shop domestically during the Biden administration in order to ensure that upcoming models can qualify for the EV tax credit, something which Trump also threatened to repeal when he took office. But don't forget about the countless other foreign and domestic manufacturers who produce legacy gas-powered cars in the States, either.
Many of these brands also have factories in Canada and Mexico which build components, powertrains, or entire vehicles that are then imported into the U.S. This could mean tariffs going in and tariffs coming out. And, again, a higher price tag on a vehicle's Monroney sticker.
It's not just the U.S. that could face higher vehicle prices, either. If a vehicle is assembled in the U.S. and exported to other markets (like 60% of the SUVs produced by BMW in South Carolina), it could ultimately be more expensive due to tariffs imposed on imported goods. Canadian residents in particular will also be affected, as an estimated 50% of the vehicles sold in Canada in 2023 were imported from the U.S.
During his inaugural address, Trump said that the U.S. would collect "massive amounts" of income specifically from foreign trade through a new agency he would like to have created called the "External Revenue Service"—meaning that the federal government would collect taxes by imposing tariffs on goods flowing in and out of the U.S.
No tariff reform was signed into office through executive order on Trump's first day, but reports from Reuters and other news agencies signal that the President will direct federal agencies to evaluate trade relationships with Canada, Mexico and China in February.