Auto Industry Prepares For Annihilation As Trump’s Tariffs Come Into Focus

With Donald Trump’s threat to impose a 25% tariff on ALL goods coming from both China and Mexico, the automotive industry is preparing for the worst. Imported auto parts and vehicles from these two countries make up more than half of the US auto market, meaning the price of every vehicle is going to rise astronomically – the same goes for repairs to existing vehicles. This is going to hit lower and middle income Americans the hardest, as Ring of Fire’s Farron Cousins explains.

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*This transcript was generated by a third-party transcription software company, so please excuse any typos.

Now that Donald Trump has selected Peter Navarro to be his top trade advisor, when he gets back into the White House, it is obvious that Donald Trump's threats to put these tariffs in place on every country on the planet. That plan will move forward. Navarro was one of the guys who helped orchestrates, uh, orchestrate, excuse me, Donald Trump's trade war during his first term. He went out there and defended these tariffs across conservative media. So with Navarro in place, who by the way, doesn't have to be confirmed by the Senate, um, the trade war is on. And one of the industries that is going to be hit the hardest, and they know it, they're issuing warnings about it right now, is the auto industry. Now, I've already talked about the fact that we have had major retailers warning people that the prices of everything are about to go up. Those retailers have already had their quarterly calls where they've discussed how they're going to raise prices on consumers. So this is happening, and the auto industry is already panicking because they fear annihilation. The biggest threat, of course, is Donald Trump's recent threat to impose a 25% tariff on all a LL, all goods coming from Mexico and Canada. Now, here's the thing about that folks, over 50%, over 50% of the automobiles and auto parts that are imported into this country, over 50% come from Mexico and Canada.

That means virtually every thing, at least half is gonna have 25% added onto the final price. The others, the other, you know, less than half, I think it's 47%, they'll only have the 10%, right? The BMW and Mercedes, which of course those two automakers over in Europe are already expressing their concerns about being able to sell in the US market because again, Trump wants a 10% tariff on them. So their prices would go up by 10%. But for other automakers, you know, you know, by the way, the ones that are like made in the USA, gm, Ford, Chrysler, yeah, those are Canadian and Mexican by the way. Now they're made in the USA. Sure. But I think made in the USA is a bit of a misnomer. The truth is they're assembled, some of them in the USA, they still do some assembly in Canada and Mexico and then bring 'em back to the us. But the assembly here in the USA, which of course is a massive industry, has to bring in those parts from somewhere, right? The final

Product may have been put together in the United States, but all the pieces for that engine, those are coming from Mexico and Canada. The pieces for the interior coming from Mexico and Canada. So yeah, it was made in the USA with parts that we had to bring in. So economists are predicting that the average cost of vehicles in the United States will rise by at least $3,000, which may not seem like a lot to you. Maybe it does. But for lower income Americans, an extra $3,000 on a vehicle can easily push these already overpriced items out of range, which of course means they're gonna have to rely on older vehicles. But hey, don't worry, right? I mean, you can just buy the parts for it and fix it up yourself. Oops, totally forgot those auto parts that you're buying at Auto Zone or O'Reilly's or wherever. Also coming with an additional 25% price increase at least.

So even maintaining their older vehicles, even if they do the work themselves, buying the parts to do it, is going to become out of reach. The auto industry, I do believe is going to be the hardest hit here in the United States.