• Investing
  • Stock
  • Editor’s Pick
  • Economy
The Significant Deals
Stock

Ford, GM operations in Canada & Mexico ‘extremely challenged’ amid tariff threats

by November 27, 2024
written by November 27, 2024

Investing.com — The U.S. auto industry faces a potential upheaval as President Trump proposes 25% tariffs on goods imported from Canada and Mexico, according to analysts at Bank of America.

These tariffs, aimed at curbing the influx of illegal drugs and immigration, threaten to disrupt the supply chains of automakers such as Ford (NYSE:F) and General Motors (NYSE:GM), according to the bank.

They explain that imports from Mexico and Canada constitute a significant portion of the U.S. auto industry, with around 4 million light vehicles and $97 billion worth of parts crossing the borders annually.

Should the proposed tariffs materialize, BofA estimates an incremental $50 billion in costs for the sector. This would equate to an added $6,800 per imported vehicle and $2,300 per U.S.-produced vehicle, translating to a $3,300 increase per vehicle sold in the U.S.—a figure that rivals automakers’ entire profit margins.

The bank believes Ford and GM, which produce 15-20% and 30-35% of their vehicles in Canada and Mexico, respectively, would be particularly hard-hit.

BofA notes that the gross impact on their earnings could mirror these percentages, as tariffs would make operations in these regions “largely unprofitable.”

Without the ability to offset these costs through price increases, they state that the companies’ production in Canada and Mexico would face severe challenges.

While BofA sees a lower-than-perceived likelihood of the tariffs being implemented, it acknowledges that the risk isn’t negligible.

Analysts suggest that an eventual renegotiation of the USMCA agreement in 2026 could introduce more stringent rules of origin and higher tariffs on non-compliant goods.

However, they note that gradual implementation may provide automakers time to adjust their production strategies, potentially minimizing disruptions.

This post appeared first on investing.com
0 comment
0
FacebookTwitterPinterestEmail

previous post
Detroit Three automakers face profit wipeout risk from proposed Trump tariffs
next post
Abercrombie expects a strong holiday quarter as growth run continues

You may also like

BASF results down on impairments, restructuring

January 27, 2025

European chipmakers slump as traders gauge DeepSeek AI...

January 27, 2025

Nasdaq futures tumble as China’s AI push rattles...

January 27, 2025

China Vanke’s CEO, chairman resign amid growing liquidity...

January 27, 2025

Fuji Media, rocked by sexual misconduct allegations, says...

January 27, 2025

Italy’s MPS shares fall ahead of Mediobanca board...

January 27, 2025

British Land stock drops following stake sale

January 27, 2025

UMG shares rally after new multi-year pact with...

January 27, 2025

BASF shares indicated 3% lower as impairments drag...

January 27, 2025

Ryanair cuts 2026 traffic forecast amid ongoing Boeing...

January 27, 2025
Fill Out & Get More Relevant News








    Stay ahead of the market and unlock exclusive trading insights & timely news. We value your privacy - your information is secure, and you can unsubscribe anytime. Gain an edge with hand-picked trading opportunities, stay informed with market-moving updates, and learn from expert tips & strategies.

    Recent Posts

    • Trump implies government could cut contracts and subsidies to Musk’s companies

      June 7, 2025
    • Procter & Gamble to cut 7,000 jobs as part of broader restructuring

      June 6, 2025
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

      June 6, 2025
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

      June 5, 2025

    Categories

    • Economy (245)
    • Editor's Pick (3,646)
    • Investing (505)
    • Stock (6,426)

    Latest News

    • Trump implies government could cut contracts and subsidies to Musk’s companies
    • Procter & Gamble to cut 7,000 jobs as part of broader restructuring

    Popular News

    • Pfizer to pay $59.7 million over kickbacks for migraine drug
    • Weak US Oct payrolls growth skewed by storms, strikes

    About The Significant deals

    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 thesignificantdeals.com | All Rights Reserved

    The Significant Deals
    • Investing
    • Stock
    • Editor’s Pick
    • Economy