Market Reaction and Industry Impact
Shares of major automakers, including GM, , and Ford, fell sharply in response to President-elect Trump's tariff threat, highlighting the industry's heavy reliance on and for parts and production.
Analysts warn that the proposed tariffs could significantly increase vehicle prices in the , with estimates suggesting an average hike of $2,100 for US-assembled cars and up to $10,000 for vehicles produced entirely in Canada or Mexico.
Political and Economic Repercussions
Mexican President vowed retaliatory tariffs, potentially endangering joint ventures and jobs in both countries, while US companies face higher production costs.
Critics argue that the tariffs contradict Trump's promise to alleviate inflation and could destabilize US trade relations, with long-term effects on consumer prices and the auto industry's operational stability.