U.S. automakers importing cars from Mexico have received a reprieve on tariffs after President Donald Trump secured an agreement on migration with the neighboring country.
The President had been threatening to impose tariffs on Mexican goods imported into the U.S. for months in a bid to encourage the country’s government to step up enforcement on illegal immigration.
Trump announced on May 30 that a 5 per cent tariff on all Mexican imports to the U.S. would go into effect on June 10 and eventually increase to as much as 25 per cent by October. Following the deal, these tariffs have now been suspended.
“I am pleased to inform you that The United States of America has reached a signed agreement with Mexico,” Trump said in a tweet. “The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended.”
In total, there are 39 new cars and trucks built by U.S. companies in Mexico and imported to the States. Auto News reports estimates from Deutsche Bank indicated that General Motors would have taken a $6.3 billion hit before interest and taxes if the full 25 per cent tariff was enforced. FCA would have been lost $4.8 billion and Ford up to $3.3 billion.
Car manufacturers were left scrambling last week when President Trump announced the proposed tariffs as, according to LMC Automotive, prices of Mexico-imported vehicles could have risen by an average of $8,500. Analysts also suggested that, if implemented, the 25 percent tariff would have cut new car sales in the United States by up to 1.5 million units annually.
Another false report in the Failing @nytimes. We have been trying to get some of these Border Actions for a long time, as have other administrations, but were not able to get them, or get them in full, until our signed agreement with Mexico. Additionally, and for many years,….
— Donald J. Trump (@realDonaldTrump) June 9, 2019