On Friday, global auto and parts makers began developing contingency plans and considering ways to speed up some shipments after President Trump intimidated Mexico with new tariffs on all of its imports starting next month.
Companies based in North America, Asia and Europe have held conference calls and meetings to see if they can increase shipments of certain shipments and vehicles to mitigate the negative impact of new Mexican tariffs, company executives and representatives from trade groups said. .
These tariffs should be introduced from June 10 at 5 percent, from July 1 - to increase to 10 percent and, ultimately, to reach 25 percent from October 1 “unless Mexico significantly stops the illegal influx of foreigners entering its territory "Trump said on Twitter on Thursday.
Shares of automakers fell on Friday. Deutsche Bank warned that a 25 percent tariff on vehicles and parts imported from Mexico would result in losses of $ 23 billion, which “could hurt the industry.”
Some companies still hope Trump will change course, auto sector executives said.
The Engine and Equipment Manufacturers Association has warned US governors, members of Congress and the White House that tariffs “will serve as an additional tax for the American people only by increasing the cost of goods and creating risks to jobs and investments in the US. In short, this action will undermine the economic stability in the United States. ”
Already, Trump's tariffs on steel and aluminum have added billions of dollars to the cost of assembling cars in the US, and tariffs on Chinese-made parts have also increased costs. Companies such as General Motors Co, Tesla Inc, Fiat Chrysler Automobiles (FCA) and dozens of parts suppliers have asked the government for assistance.
GM and Ford Motor Co have laid off thousands of workers in recent months, citing a rapidly changing industry. Other companies have cut hundreds of jobs.
The industry has spent over a year fighting to convince Trump to drop the threat of imposing 25 percent tariffs on all imported cars and parts for national security reasons.
Trump, who often boasts of a strong economy and stock market, believes tariffs could actually spur growth in the US. On Friday, he said that to avoid tariffs, "companies will leave Mexico, which has occupied 30 percent of our auto industry, and return home to the US."
Industry officials say it takes years and billions of dollars to relocate production, and that lower-margin cars cannot be built profitably in the United States.
