On February 1, President Donald J. Trump imposed new tariffs on goods originating from its most immediate neighbors, Canada and Mexico, that would take effect on February 4. For weeks, he has been teasing these measures, specifically a 25% tariff on all imported goods originating from the two countries—save for a 10% carveout for Canadian oil.
In a press briefing on Friday, January 31, White House spokesperson Karoline Leavitt reiterated the President’s stance on the matter, which Trump first mentioned in a November 2024 Truth Social post.
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In the post, he justified threatening 25% tariffs on goods from Mexico and Canada, as well as 10% tariffs on Chinese imports, as a way to blame the three countries for the U.S. drug crisis, as well as its immediate neighbors for cross-border issues such as illegal immigration.
“The President will be implementing tomorrow 25% tariffs on Mexico, 25% tariffs on Canada, and a 10% tariff on China for the illegal fentanyl that they have sourced and allowed to distribute into our country, which has killed tens of millions of Americans,” Leavitt said.
U.S. President Donald Trump reacts to a reporter’s question from the Resolute Desk
Chip Somodevilla/Getty Images
At the time of writing, the President announced via a post on Truth Social that tariffs levied against Mexico will be “immediately” paused “for a one month period” following what he called a “very friendly conversation” that ended with Mexican President Claudia Sheinbaum agreeing to “immediately supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States.”
“These soldiers will be specifically designated to stop the flow of fentanyl, and illegal migrants into our Country,” Trump said on Truth Social. Furthermore, he added that the during the one month tariff pause, “negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico” will take place to “attempt to achieve a ‘deal’.”
However, while these details hang in the balance, tariffs on both Mexico and Canada will likely impact many industries on both sides of the respective borders, including the automobile industry.
In a televised speech, Canadian Prime Minister Justin Trudeau warned that Americans would also suffer from Trump’s actions, which he warned will trigger retaliatory tariffs on American goods if tariffs are to take effect on February 4.
“Tariffs against Canada will put your jobs at risk, potentially shutting down American auto assembly plants and other manufacturing facilities,” Trudeau said in a section meant to address U.S. citizens during televised remarks. “They will raise costs for you, including food at the grocery store and gas at the pump.”
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Many consumers’ favorite cars may get more expensive under Trump’s threatened tariffs
Bank of America
According to data from Bank of America Global Research, American automobile manufacturing, alongside the manufacturing of electrical equipment and appliances, is at the most risk of harm from the U.S. tariffs, as imports make up a significant chunk of revenue in both industries.
As per the chart, 24% of the revenue in both auto manufacturing and electrical equipment and appliance manufacturing comes from imports.
At a consumer level, foreign and domestic automakers will feel the hit from U.S. tariffs on Mexican and Canadian exports, which may translate to higher sticker prices at the dealer.
Audi
The bestselling model from Volkswagen luxury brand Audi — the Q5 crossover SUV, is made in a factory in San Jose Chiapa, Mexico, which is staffed by just over 5,000 employees. According to Audi of America’s 2024 year-end sales report, sales of the Q5 is down 23%, but the raw numbers show that in 2024, 56,799 Q5’s were sold in the US and 74,145 were sold in the year prior.
The $66,000 BMW M2 on the production line at BMW’s San Luis Potosi plant in Mexico.
BMW
BMW
The letters BMW may roughly translate to ‘Bavarian Motor Works’ from German, but some of the ‘Ultimate Driving Machines’ on American roads are made in a factory in Mexico. While the bulk of its bestsellers—its X-series of crossover SUVs, are made in its Spartanburg, South Carolina plant, its San Luis Potosi, Mexico factory makes some of its other attractive models, including the 2-Series coupe, the high-performance M2, and the 3-Series sedan, with most output headed for the American market.
Ford
The Blue Oval (F) may be Dearborn-bred, but some volume models are made south of the Border. It operates three plants in Mexico: its Chihuahua engine plant makes engines for passenger cars and V8 engines for diesel and heavy-duty trucks, while its Cautitlan assembly plant makes the Mustang Mach-e EV, and the Hermosillo assembly plant produces the compact Bronco Sport and Maverick pickup truck.
Over in Canada, Ford has an assembly plant in Oakville, where it recently spent $2.3 billion to retool for production of Super Duty F-Series heavy duty pickup trucks.
A Chevrolet Silverado on the assembly line at GM’s Oshawa, Ontario, Canada plant.
General Motors
General Motors
The bright blue logo of General Motors (GM) atop Detroit’s Renaissance Center may be visible across the river in Windsor, Ontario. Still, its presence in the land of the maple leaf is much more than symbolic.
In Canada, GM operates three plants across Ontario. The CAMI Assembly in Ingersoll makes the Chevrolet BrightDrop electric van, while the Oshawa Assembly plant helps provide the American market with Chevrolet Silverado trucks. Meanwhile, its St. Catharines Propulsion Plant produces V8 engines and dual-clutch transmissions shipped to GM plants worldwide.
In Mexico, GM operates four factories producing vehicles and critical parts. Its Toluca factory makes engines, while its San Luis Potosí facilities make gearboxes, as well as the Chevrolet Equinox and GMC Terrain SUVs. Meanwhile, its Silao facility supplements American and Canadian production of the Chevrolet Silverado and GMC Sierra pickup trucks alongside their engines and gearboxes, while the Chevrolet Blazer, Blazer EV, and Equinox EV, as well as CVT transmissions, Turbo 3-cylinder engines, and small-block V8s, are made in Ramos Arizpe.
Honda
Shortly after the election, a key Honda (HMC) executive warned that Trump’s potential tariffs could impact its imports of vehicles and parts. Currently, it imports the HR-V compact crossover and Prologue electric vehicle (from one of GM’s factories) from Mexico.
In Canada, Honda produces the compact Civic sedan and hatchback and the CR-V crossover SUV at its Alliston, Ontario plant, which supplements U.S. production of both models.
A worker attaches a Kia Motor Corp. badge to a vehicle at the company’s assembly plant in Pesqueria, Mexico
Hyundai/Kia
South Korean auto brand Kia operates a plant in Pesquería, near Monterrey, Mexico, where it currently makes the compact Kia K4 sedan and the Hyundai Tucson crossover SUV for its sister brand.
Kia says that as of August 2024, its Mexican plant has made over two million cars since it came online in 2016 and that vehicles made at the plant are exported to more than 190 countries.
Mazda
Japanese automaker Mazda currently operates a factory in Salamanca, Mexico, where it currently makes U.S.-bound Mazda3 compact sedan and hatchback, as well as the CX-30 subcompact crossover SUV, as well as other vehicles not offered in the U.S.
Mazda considers North America its most important market. In 2023, Mazda’s Salamanca factory produced 202,506 units, with around 120,000 of those vehicles reaching the U.S. According to Mazda, its Mexican factory accounts for one-third of its sales volume in North America.
2024 Nissan Kicks
Nissan
Nissan/Infiniti
Japanese automaker Nissan makes the compact Sentra, subcompact Versa and Kicks crossover models for the U.S. market at its plants in Aguascalientes, Mexico. Additionally, it operates the Cooperation Manufacturing Plant Aguascalientes (COMPAS), a joint venture with German luxury automaker Mercedes-Benz.
Recently, Nissan said it plans to phase out the production of the Infiniti QX50 and QX55 in December. The entry-level luxury SUVs are built alongside the Mercedes’ compact GLB crossover at the plant. In an interview with Automotive News, Ponz Pandikuthira, Nissan’s head of American product planning, said the move was an effort to take the Infiniti brand upmarket.
“If you go into a showroom and you have cars like the QX60 and the QX80, the special versions we have planned — QX50 and QX55- start looking dated,” Pandikuthira said.
Stellantis
Multinational automaker Stellantis (STLA) , the parent company of American nameplates like Dodge, Jeep, Chrysler and Ram Trucks, makes some of its “American cars” both in Mexico and Canada.
In Mexico, Stellantis makes Ram pickup trucks and cargo vans at a plant in Saltillo, while the midsize Jeep Compass SUV is made in a factory in Toluca.
In the Great White North, Stellantis operates two separate plants within the province of Ontario. Its Windsor, Ontario plant across the Ambassador Bridge from Detroit makes the Chrysler Pacifica, the Chrysler Pacifica Plug-in Hybrid, the Chrysler Voyager, and the Dodge Charger Daytona EV, while its Brampton plant is currently undergoing retooling for a new Jeep model in 2025.
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Toyota/Lexus
Japanese auto giant Toyota (TM) makes both Toyota and Lexus brand vehicles for the U.S. market in both Canada and Mexico.
Toyota’s Canadian manufacturing operations are concentrated in the province of Ontario, where it operates three plants in two cities. The North Plant and South Plant in Cambridge, Ontario is respectively home to some of Lexus’s popular vehicles, the NX crossover SUV and the Lexus RX crossover SUV. The North Plant, alongside the West plant in Woodstock, Ontario, share production of the Toyota RAV4 with its Kentucky plant.
Toyota builds its Tacoma pickup truck at its two plants in Mexico. In 2024, it sold more than 192,813 of them in the U.S., representing nearly 10% of Toyota’s total sales in that market.
Volkswagen
According to Volkswagen, the German automaker’s Puebla, Mexico plant is the largest in the country and one of the largest in the Volkswagen Group.
The plant makes U.S.-bound versions of the Tiguan crossover SUV, the Jetta sedan (,) and the Taos compact crossover SUV. Last year, sales of the trio of Puebla-made vehicles made up a significant majority of its U.S. sales, about 60.7%.
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