Auto companies are preparing for the possibility that big tariffs will be imposed on goods coming from Mexico. The impact on the Detroit-3 could be hefty.
President Trump wants to get tough on illegal migrants streaming across the border, intending a 5-percent tariff starting June 10.
If the tariff rose to the full 25-percent, as threatened by the President, Deutsche Bank of Germany estimates that GM would lose 6 pt 3 billion dollars before interest and taxes over a year… Fiat Chrysler 4 pt 8 billion… and Ford 3 pt 3 billion. Trump said the tariff would go to 25 percent by October if Mexico doesn’t take more effective steps to stop illegal border crossers.
Analysts say 14-percent of vehicles sold in the U-S are made in Mexico.
They say that tariffs could stall passage of a new NAFTA replacement agreement, and could tempt some businesses to move to even cheaper low-cost countries.