WASHINGTON D.C. — The Vehicle Suppliers Association (MEMA) is cautioning that President Trump's threat to impose tariffs of up to 25% on goods from Mexico and Canada would have "severe consequences" for the U.S. vehicle supplier industry, jeopardizing jobs, increasing costs for consumers and undermining a highly integrated North American supply chain.
Imposing such tariffs "will place additional pressure on the supplier industry and impede the ability of supplier companies to grow, invest and operate their businesses," MEMA said in a communique issued the day before Trump's threatened tariffs could be imposed.
President Trump has declared on a number of occasions that he intends to announce tariffs on Canada and Mexico — in an attempt to sway them to be more diligent on allowing undocumented migration across their borders into the U.S. — on Feb. 1.
Noting that the vehicle supplier industry supports over 930,000 jobs in the U.S., MEMA said tariffs of this magnitude "would drive up costs for manufacturers, reduce investment in U.S. production and force job losses across the industry."
The United States-Mexico-Canada Agreement (USMCA), negotiated in 2018 by President Trump and supported by MEMA, was designed to provide certainty and promote regional manufacturing. These tariffs will undermine this critical framework, creating economic uncertainty and deterring growth, the trade group said.
A 25% tariff would increase the cost of essential vehicle components considerably, with those added costs inevitably passed down to consumers, who would then face further strain on household budgets and disrupt affordability in the automotive sector.
Canada and Mexico are the U.S.'s largest U.S. export trading partners, supporting millions of American jobs. Undermining this trade with costly tariffs would only weaken U.S. competitiveness and hinder economic stability, MEMA said.
Mexico and Canada are two of the U.S.'s largest trading partners in tires as well, representing nearly $4 billion in imports and $3.7 billion in exports. Of the largest trading partners, the U.S. has a trade surplus with only one country, Canada at $90.5 million.
Exports of tires from Mexico are almost certain to increase in the coming years as three factories under constructions there — representing production of over 20 million new consumer tires annually — are slated to come on stream.