The onset of a global trade war marked by President Trump's tariffs on Canada and Mexico has significant implications for the automotive industry, which was already under pressure from technological shifts and stiff competition, particularly from China. As automakers face steep challenges, including the potential for reduced production and higher vehicle prices, the industry leans on past experiences, notably the COVID crisis, to navigate these disruptions. Immediate effects include limited model availability and a stark reduction in daily vehicle output, highlighting the precarious state of the market.
While significant disruption is inevitable, at least there's a playbook from the last big shock to hit the industry: COVID.
The fallout will be almost immediate, with sharply higher vehicle prices and limited availability of certain models, industry experts say.
'This isn't hypothetical. All automakers will be impacted by these tariffs on Canada and Mexico,' John Bozzella, president and CEO of the Alliance for Automotive Innovation, said in statement.
At best, we're probably looking at maybe a week's worth of supply of (parts) inventory,
The trade war is hitting at the same time they're juggling sweeping technological change, regulatory pressures and powerful Chinese competition.
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