This would increase the price of cars in the US with the 25% tariff on Mexico

Donald Trump has renewed his threat of tariffs on imports from Mexico and Canada on April 2, declaring that they will take effect if the two countries demonstrate progress on the border by March 4, the date initially planned.

In this context, businessmen from the auto parts sector in Mexico warned that the imposition of 25% tariffs on Mexico will increase the price of cars by up to 3 thousand dollars per unit in the US market , warned representatives of the auto parts, auto transport and heavy vehicle sectors.

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The CEO of the National Auto Parts Industry, Francisco González Díaz, said that "it is estimated that a 25% tariff would raise the average price of cars in the United States by 3 thousand dollars."

"If the United States stopped importing vehicles from Mexico and Canada, it would need 18 new plants and more than $50 billion in vehicle assembly plants alone, and it would need about 300 auto parts plants. Not only would it be necessary to have more production, but because of prices, a million sales in the United States would fall, according to our estimates."

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Participating in a working meeting in Senate committees, he explained that in the case of the production of Buses, Trucks and Tractors , the price increase per unit would reach 35 thousand dollars .

Rogelio Arzate, executive president of the National Association of Bus, Truck and Tractor Producers, said that "if the United States imposes a 25% tariff, the increase in the price of vehicles would go up to 35 thousand dollars, if like Mexico we impose a tariff as well, the increase in the price of the units would go up to 50 thousand dollars directly…"

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Cristina Vázquez Ruiz, from the Mexican Association of Automobile Distributors, argued that in the particular case of Mexico, if the 25 percent tariff were implemented, an impact equivalent to a reduction of two percentage points of GDP would be expected and clearly this impact would have its correlations with the various sectors of the national economy ; the case of distribution in the Mexican domestic market is no exception.

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