The threat of US President Donald Trump’s significant tariffs on border nations Canada and Mexico has been delayed by 30 days, allowing carmakers and other potentially impacted industries extra time to plan for the worst.
The proposed tariffs were due to be implemented today, and would’ve resulted in all goods from Canada and Mexico hit with a 25 per cent tariff – breaching the United States–Mexico–Canada Agreement for free trade which was signed by President Trump in 2018.
However, following discussions with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum – who have each promised to meet President Trump’s border security demands – the US leader has delayed the introduction of the tariffs by 30 days.
Hundreds of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now.
This is welcome news to carmakers, as the proposed tariffs could have a significant impact on the US automotive sector.
A report by The New York Times showed General Motors, Stellantis, Toyota and Honda all produce approximately 40 per cent of all vehicles sold in North America in either Canada or Mexico, while Ford also builds cars and pickups across both nations.
Audi, BMW, Honda, Kia, Mazda, Nissan and Volkswagen all have car factories in Mexico which export to the US.
As reported earlier this week, Flavio Volpe, CEO of the Automotive Parts Manufacturers’ Association, told Automotive News the 25 per cent tariff on Canada and Mexico is “15 per cent higher than anybody’s profit margin”, warning it could have a devastating effect on the industry.
“The dominoes will fall as the quick debates happen on who is going to absorb the 25 per cent,” Mr Volpe said.
“Nothing that Donald Trump says will change the fact that he will bring his own industry to a screeching halt.”
While Prime Minister Trudeau had threatened to impose a 25 per cent tariff on C$155 billion (A$171.7 billion) worth of US goods, this has also been delayed pending the outcome of the US-led tariffs.
MORE: Donald Trump bringing US carmakers to ‘a screeching halt’ with tariffs
