Business

Here’s How Trump’s Tariffs On Mexico Could Affect American Automakers

REUTERS/Jonathan Ernst

Daily Caller News Foundation logo
Chris White Tech Reporter
Font Size:

Economists are warning President Donald Trump’s idea to slap steep tariffs on Mexican goods could do serious and prolonged damage to the automotive industry.

Trump suggested in a tweet Thursday night that he would begin placing a 5% tariff in June on Mexican products until Mexico does more to stem the tide of illegal immigrants coursing through its border with the U.S. The global nature of American auto production puts the sector at particular risk, economists said.

The president said the potential tariffs would be raised to 10% on July 1 if the country fails to act on immigration issues, and then by an additional 5% each month for the following three months. Tariffs would stay put at 25% until Mexico took action, Trump said in a statement following his tweet.

Economists argue that much of American trade with Mexico revolves around the global supply of auto parts.

“Trade with Mexico is basically all about the supply chain, which essentially is all about cars,” Deutsche Bank Securities chief economist Torsten Slok said in a note Thursday night.

U.S. President Donald Trump gives out pens he used to sign presidential proclamations. REUTERS/Leah Millis

Auto companies inside the U.S. constantly trade parts with their counterparts in Mexico to meet consumer demand, experts said.

“The risk of increased tariffs on global auto trade remains real and would be a significant drag on global GDP if it were to materialize,” ratings agency Fitch’s chief economist Brian Coulton wrote in a report Tuesday.

The impact could be substantial as Mexico sent the U.S. more than $346.5 billion of goods in 2018, meaning that a 5% tariff could mean a $17 billion tax increase on companies, The New York Times noted in a report Thursday addressing Trump’s tariff pitch. This is not the first time Trump has floated such an idea.

The president threatened to place a 25% tariff on cars assembled in Mexico for similar reasons in April. Trump imposed tariffs on $250 billion worth of Chinese goods and threatened to tax nearly all Chinese imports. (RELATED: Trump Plans To Impose Tariff On Mexico To Encourage Them To Stop Illegal Immigrants)

Trump’s tariff push is one of a handful of maneuvers he is using to address what he describes is a national crisis at the border. He started kicking asylum seekers to Mexico where they are required to wait while their cases are adjudicated, which has become known as the Remain in Mexico policy.

Acting Secretary of the Department of Homeland Security (DHS) Kevin McAleenan told reporters Mexico needed to do three things to avoid tariffs: increase security at its Guatemalan border, address its criminal gangs that help migrants and help the U.S. deal with asylum seekers.

Follow Chris White on Facebook and Twitter

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel