Why Are the USA Customs and Border Security Rules Slapped with Tariffs? The U.S. Taxes on Mexican, Mexico, and China
Canada, Mexico, and China are now being slapped with tariffs by the US. Goods from Mexico and Canada will be taxed at 25 percent, while goods from China will be taxed at 10 percent. A lower 10 percent tariff on energy resources from Canada will also be in place. The administration wrote on X that they were holding China, Mexico and Canada accountable for their promises to stop the flood of poisonous drugs into the United States.
“This was done through the International Emergency Economic Powers Act (IEEPA) because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl,” Trump said in a post on Truth Social. As President, I have a duty to ensure the safety of all.
One of Trump’s campaign promises was to impose tariffs, and he has floated additional ones like a tax on Taiwan. (He’s also made threats against Denmark and Colombia.) During Trump’s inauguration speech, the president said he will “immediately begin the overhaul” of the US trade system. “Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens.”
Why will American automakers brace for the massive impact of Trump’s tariffs? The automakers warn against a free, fair, and open market
Consumers exit when the price goes up. “They’re gonna hold off, they’re gonna wait. They may go to the used market. I’ll tell you what, if pricing on the new market goes up, guess what? That pricing on the used market is gonna be impacted because it’s a supply and demand thing.”
Most manufacturers have contingency plans, but they aren’t sure what those plans are. Ford and BMW declined to comment.
Volkswagen’s Puebla factory is Mexico’s largest and one of the biggest in the Volkswagen Group, making nearly 350,000 cars in 2023, including the Jetta, Tiguan, and Taos models, all for export to the United States. The company said it still remains a strong advocate for free and fair trade.
The German auto giant added that they were planning for various scenarios. “We hope for a swift resolution on tariffs across North America.”
Virtually every car company will be impacted: Ford’s F-series trucks and Mustangs with engines made in Canada; Mazda CX-50s from Mexico; full-size pickup trucks from General Motors and Stellantis; even the Toyota Rav-4.
But most economists expect the outcome to be higher prices for a wide range of consumer goods, from clothes, to shoes, to food, to cars. Don’t be deceived, Trump claims foreign companies will eat the higher costs.
You may not see higher MSRPs right away, says Mike Wall, executive director for automotive analysis at S&P Global Mobility. But you will likely see fewer incentives and special deals at dealerships as dealers get stingier about their vehicle inventories. There is a chance that fewer cars and trucks will be made as manufacturers consider the costs of paying duty on key parts. Eventually, the higher cost of building and selling a car in the US will filter down to the consumer.
Source: Automakers brace for ‘massive’ impact of Trump’s tariffs
A Conversation with Anise Sasso on EVs, Public Transportation, and Aviation (with an Emphasis on Transportation and Public Transportation)
is transportation editor with 10+ years of experience who covers EVs, public transportation, and aviation. His work has appeared in newspapers.