Automakers Scrambling To Prepare For New Tariff, Could Increase Prices Of Mexican-Made Models By $8,500

The United States is set to impose a five percent tariff on all goods imported from Mexico on June 10th and a number of automakers are scrambling to prepare for potentially devastating impacts.

According to Reuters, some automakers are planning to delay shipments of vehicles made in Mexico. This could prove disastrous if tariffs remain in place and continue to rise, but the publication says the delays are only aimed at models which have high levels of existing inventory in the United States.

While some companies are planning to delay shipments, others are rushing to beat the clock. In particular, the publication says a handful of companies are trying to get critical parts out of Mexico before the tariffs go into effect.

While the tariff is already wrecking havoc on the supply chain, the biggest blow could be yet to come. According to LMC Automotive, prices of vehicles imported from Mexico could climb by an average of $8,500. That’s a huge jump and it means Mexican-made vehicles would no longer be an option for a number of American consumers.

Of course, we live in a global market and a number of automotive components are built in Mexico. This means vehicles made in the United States would also be impacted by the tariff as many use parts sourced from south of the border.

The rate and duration of the tariff will have a big impact on how devastating it is. As we have previously reported, the tariff starts at five percent but could eventually hit 25 percent – on October 1st – if Mexico doesn’t take “effective actions” to limit the flow of migrants and drugs coming into the United States.

LMC Automotive believes the industry can absorb the impact of a five percent tariff for about a month, but anything more could be disastrous. Their analysts believe a prolonged 25 percent tariff could cut new car sales in the United States by up to 1.5 million units annually and possibly push both countries into a recession.

Also Read: Trump Announces 5% Tariff On All Goods From Mexico, Including Cars

The tariff would have a huge impact on Mexican-made vehicles and Car & Driver reports there are 39 models built in the country and imported into the United States. GM would be particularly hard hit as the company imports popular vehicles such as the Chevrolet Blazer, Equinox, Silverado and Trax as well as the GMC Terrain and Sierra.

Nissan would also be hard hit as imports include the Frontier, Kicks, Sentra, Versa and NV200. Other models facing the tariff include the Audi Q5, BMW 3-Series, Honda HR-V, Infiniti QX50 and Jeep Compass. That’s not even mentioning the Toyota Tacoma and Volkswagen Tiguan, but you can check out the full list here.

Tacoma TRD Pro

  • Jason Miller

    Frontier is produced in Canton, MS.

  • Liam Paul

    that is what GM gets for building cars and buying parts in mexico

  • Stigasawuswrecks

    Well he did say he’d run the government like a business. Too bad it’s like one of his many failed businesses.

    • Enter Ranting

      People voted for a “businessman” who failed at selling steak, gambling and booze to Americans. Sad.

      • Stigasawuswrecks

        If it wasn’t for his dad he’d be a nobody. His dad is the one who financed and bailed him out. Even his dad knew he was a disaster.

  • Alduin

    Heres a thought stop buying Mexican made goods in the first place?

    • Six_Tymes

      yeah right, like say no to drugs, as if that worked.

      • Alduin

        Drugs are cheaper in Mexico doesn’t mean they’re safer.

    • Jason Miller

      But I’m sure you own plenty of items that come from China. Irony.

  • MarkoS

    Ok, I doubt many people will be paying that much extra for that model. Plant production slows or stops and Mexico is forced to make some changes. Go #45! KAG2020!

    • 20 TAX EVASION, 20 TREASON.

  • benT

    GOOD!
    I have never been a fan of making cars off shore.

    • Six_Tymes

      at least you understand the process and the point. kudos to you for being smart, and not a smartASS

  • Uh9uhmus

    Moron. He knows nothing of economics. He has no idea how far-reaching his adolescent impulse control issues go. Worse, he doesn’t care. Even worse, nobody has the balls to stop him, He got his trophy. Now it’s time to go.

  • Six_Tymes

    OK so… bring production BACK into they’re own countries of origin then?

    • Matt

      Sure – all those Toyota, Honda, BMW, Mercedes, VW employees in the USA can go look for new work too. Stop foreign carmakers building their models in the US!

  • Giannis Antypas

    When for decades China or Japan or european countries have been protecting their business interests,
    there is no fuss about it.
    When USA wakes up, then it is called protectionism.
    Yeah sure…

  • Enter Ranting

    This is the part where the Republicans in the Senate start to turn on the orange imbecile.

    • Porkopolis

      Car companies will absorb most the cost initially because they can’t increase prices on the customer. Mexico will come to some agreement with the US to bolster Mexico’s southern border. Life will return to normal and most Americans and Mexicans won’t even know this happened.

      • Enter Ranting

        Actually, it’s looking like Mexico is threatening tariffs of their own.

  • Enter Ranting

    Action?! With Drumpf, everything is RE-action. And this is that ghoul Stephen Miller’s idea, not Drumpf’s. Miller’s plan is going to blow up in his face. Or, it would if the Senate Republicans would let it pass, which they won’t. Unlike Drumpf, they’re not irretrievable idiots.

    • Porkopolis

      Ah, Miller the Svengali. Political “discussion” always contain the same tropes. Miller or Kushner are Trump’s Rasputins. Valerie Jarrett and Rahm Emmanuel controlled the Obama oval office. Cheney was the puppetmaster of the Bushes. Bush controlled Reagan. Etc.

  • Enter Ranting

    Remind me again, where is it that the champion of American jobs makes his ties and suits, and everything else he sells under his “lifestyle” brand? Extra points for bringing up Hillary, though. Such a shame all the irreversible damage Her Emails™ did to the country!

  • Porkopolis

    Labor union members in various manufacturing industries are primarily on the Trump Train these days. Teachers unions on the other hand…

  • brn

    Is the 25% based on MSRP? If so, the average MSRP of a vehicle made in Mexico is $34K? That seems high. If the 25% isn’t based on MSRP, the price is even higher.

    This is having trouble with the smell test.

  • brn

    I don’t necessarily agree. I saw a basic metal bench the other day, selling for $250 and was made in China. No reason that couldn’t have been made in the US, while still making a ton of profit. Make it in the US and you could probably use US steel, which tends to be of higher quality.

    Over the last 20 years, we’ve seen similar things with items such as small engines and appliances. As production shifted to China, the quality dropped dramatically, yet the price didn’t drop as well. Often the price went up!

    Why can’t we sell a quality product for a fair price and still make a sizable profit? We can.

  • datCubanguy

    Forgive me if I doubt a man that lost 1.17B in 10 years on different business,one of them,a casino where the house never looses,peace y’all!

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