President Trump's proposed tariffs of 25 percent on goods from Canada and Mexico may heavily impact the automobile industry due to intricate supply chains developed over the past three decades. Automakers have established cross-border supply chains that enhance production efficiency and keep vehicle prices affordable. The complexity of these systems blurs the lines of what constitutes an American-made vehicle, as assembled cars often contain parts from multiple countries. For instance, the Chevrolet Blazer is made in Mexico with U.S.-sourced parts, complicating tariff application.
Vehicles would be less affordable if all the parts had to be made in one country. The complexity of supply chains complicates the definition of American-made.
Over the last three decades, automakers have built supply chains that cross the borders, achieving economies of scale that benefit both companies and consumers.
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