25% Tariffs on Mexico and Canada Could Cost Detroit Automakers Billions

The looming threat of a 25% tariff on imports from Canada and Mexico has the global automotive industry on edge. The uncertainty has already impacted General Motors (GM), with its stock experiencing one of its worst days in years despite beating Wall Street’s expectations for its 2025 guidance. GM, the top-selling automaker in the U.S., has not accounted for potential tariffs in its guidance, taking a cautious approach. The industry is deeply integrated, with Mexico importing 49.4% of its auto parts from the U.S. and exporting 86.9% of its production back. Wells Fargo estimates that these tariffs could cost Detroit automakers billions annually, with impacts of $13 billion, $25 billion, and $56 billion for 5%, 10%, and 25% tariffs respectively. S&P Global Mobility reports that a 25% duty on a $25,000 vehicle would add $6,250 to its cost, potentially passed onto consumers. The automakers most exposed to these tariffs, based on U.S. sales from Mexico, include Volkswagen at 43%, Nissan at 27%, and Stellantis at 23%.

Source: www.cnbc.com