automotive

High Import Tariffs Imposed By Donald Trump Harm The Automotive And Electronics Industries, With Canada Being The Most Affected

The automotive sector, along with the electronics industry, is anticipated to be directly affected by the high import tariffs imposed by U.S. President Donald Trump on products imported from China, Canada, and Mexico. This regulation is set to take effect on Tuesday, February 4, 2025. 

According to a report from France24, the United States is the primary destination for Canadian exports, absorbing 80 percent of Canada's total export goods, valued at approximately $410 billion. Should the tax policy be enacted, it would significantly impact Canada's automotive and energy industries, which account for over 40 percent of Canadian exports to the United States. 

The automotive sector in Ontario is expected to face particular challenges, as various components cross the border multiple times before being assembled into finished products. Additionally, the U.S. imports building materials from Canada, indicating that the import tariffs could lead to increased housing costs. 

Last year, exports from Mexico to the United States represented 84 percent of its total global sales, amounting to over $510 billion. The automotive industry in question includes vehicles and parts, as well as the electronics and machinery sectors. These areas are likely to experience the most significant effects from the implementation of the new import tariffs in the U.S. 

The United States will also feel similar repercussions, with the new tariffs projected to raise vehicle prices by up to $3,000 per unit. Furthermore, gasoline prices in the Midwest are expected to increase by 50 cents per gallon due to higher oil import costs. The latest 25 percent tariff policy will also impact sectors such as food, as Mexico supplies 63 percent of U.S. vegetable imports and nearly half of U.S. fruit and nut imports in 2023. 

Tag: Automotive Donald Trump Electronics Industry