Trump's duties could cost US auto industry $33bn - forecast
US President Donald Trump's imposition of duties on imports from Canada, Mexico and China will reduce the operating profits of carmakers in the country by $33 billion, analysts estimate. Low-income consumers will also suffer, as car prices and the cost of living could rise significantly.
Here's What We Know
From 4 February 2025, US duties will come into effect:
- 25% duties on goods from Mexico and Canada
- 10% duties on imports from China
As the Nikkei notes, this will be a major blow to the US auto market and the auto industry, as:
- 27% of imports from Mexico between January and November 2024 are cars and auto parts
- 12% of imports from Canada are also automobiles and parts
- 22% of new cars sold in the U.S. last year were assembled in Canada or Mexico
It's not just automobiles that will be affected by the duties, however. The United States imports about 60 per cent of its oil from Canada. In addition, the northern neighbour accounted for about 40% of minerals and metals imported into the United States in 2023.
Mitsui Co USA president Sayu Ueno said the duties, like the consumption tax, are regressive, so the impact is greatest on low-income consumers.
Source: Nikkei Asia
