Proposed 25% tariffs on Canadian and Mexican imports could erase profits for Detroit automakers.

From Investing.com: 2024-11-27 08:50:06

Analysts warn that a proposed 25% tariff on Canadian and Mexican imports could erase all profits for Detroit automakers Ford, GM, and Stellantis, creating major challenges for the US auto industry.

The potential tariffs would disrupt supply chains, leading to higher vehicle prices and significant impact on the industry.

GM and Stellantis are more vulnerable than Ford due to reliance on Mexican imports, while suppliers like Aptiv, American Axle & Autoliv are also at risk.

Analysts note that GM and Ford have the largest drop-off in US-Canada sourcing, increasing material cost inflation risk with Trump’s tariff threats.

Barclays highlights that OEMs operate on thin margins, making a 25% tariff on vehicles and parts from Mexico/Canada a significant cost for automakers to bear.

While unlikely, the tariffs pose broader risks for the auto sector, with analysts cautioning against underestimating the impact of tariff-driven inflation and supply chain disruptions.



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