US President Donald Trump has a two-Baarel gun, directly pointing to the southern neighbors Mexico and the northern colleague Canada, threatening to increase tariffs on several items imported in the US. And the list is mainly exposed by passenger vehicles with Mexico as one of the largest exporters of cars in the world’s second largest vehicle market.
In 2024, Mexico exported 28 million units of light vehicles to the US. It was about 80 percent of all its vehicle exports a year, and a record. Prominent car manufacturers such as Honda, Nissan, Toyota, Salentis, Volkswagen and even General Motors and Ford make several models in Mexico and then export them to markets in the north. But why?
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Mexico has emerged as a major motor vehicle hub for various reasons. It is centrally located and it is easy to export cars from here to America. Labor costs are competitive while a skilled workforce and decent infrastructure are important factors that have made the country a close-to-side base for establishing factories. Voxwagen’s Audi plant is in San Jose Chiapa. BMW’s plant is in San Luis Potosi. Ford has three plants in the country. GM has four plants here. The annual production capacity of the Honda factory in the country is about 18 lakh units. And there are many others.
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In recent times, however, many car manufacturers have had to align the plans and again align strategically as it may have been attractive over the years while constructing Mexico, Trump as the US President In the first term, Trump is once again threatened with high tariffs on imported vehicles.
Why are Donald Trump targeting imported vehicles?
A few days ago, Trump imposed 25 percent tariffs on several goods imported from Mexico and Canada to the US. The list included cars. And while now the implementation of the new tariff has a brief break of 30 days, the car manufacturers are worried. So why are Trump banging brakes on imports?
Trump’s entire campaign in his race of the White House was mainly based on the cry of Maga – Make America Great again. And under the Maga Political Slogan, the business tycoon-petitician has promised employment, promoting production capabilities and more. “America first,” he repeatedly said that he exposes unfair trade practices by many countries around the world. And at a time when he claims that he protects the American automobile industry Also looking at, high tariffs – mutual, Trump says.
Which cars are made for us in Mexico?
In 2024, Mexico manufactured about 40 million units of cars, which increased by about five percent from the previous year. As mentioned earlier, more than half of them were exported to America. A small fraction was also exported to Canada and Germany, while the rest was sold in the domestic market.
Specific to the US, the number of highly popular cars among American buyers find its origin in Acxico.
Honda HR-V, Nissan Centra, Chevrolet Blazer, BMW 3-Series from Ford Mavric and many more, many cars that are a common view on American roads, are manufactured in Mexico. And this is what Trump says that he wants to target.
Many are not sure what car manufacturers can be forced to take to capture Trump’s ‘Shock and VicM’ business strategy. While many automotive companies have launched or underlined a plan to establish/increase manufacturing bases in the US, others are looking at their respective car model’s hiking prices if tariff growth in America forces them to do so .
