Lebanon today »Customs War .. Why will it be difficult to buy a car in Canada and Mexico?

On Saturday, Trump announced the imposition of 25% customs duties on imports from Canada and Mexico, due to what he described as the flow of migrants and drugs across the American border, in addition to the large trade deficit.

These fees are scheduled to enter into force on Tuesday morning, which gives manufacturers less than 48 hours to prepare.

The impact of the decision on the market

“The auto sector will stop within a week,” said Flavio Volby, head of the Canadian Automotive Factors Association. He added, “By 25%, no person in our work will be profit at all.”

The fees are expected to immediately affect about a quarter of 16 million cars sold in the United States annually, as well as the parts and components that are used in their manufacture.

The value of the import market and components reached $ 225 billion in 2024, according to research from Alex Partners, making it one of the most affected markets.

The possible increase in industry costs is estimated at about $ 60 billion, which will bear a large part of consumers, according to experts.

“The impact will be great, and the question is the one who will bear this cost,” said Arona Anand, CEO of the Branch of “Continental” in North America. Will the manufacturers be able to absorb this height, or will the consumer be endured in the end? ”

A crisis in the supply chain

It is possible that the effects are immediate in automotive centers such as Windsor in Ontario and Detroit, as well as through many states in Mexico.

In Mexico, companies were preparing in advance by importing more parts and cars, which could reduce the effects of fees in the first weeks. However, this is not certain in the future, indicated by Guillermo Rosalis, President of the Mexican Automobile Distributors Association.

Rosalis added that everything depends on the path that the American administration will take in this regard.

Customs duties also affect the flow of materials between the American and Mexican borders, where some car components pass through the American border until 8 times during the production process, which increases the complexity of matters for manufacturers.

According to analysts’ expectations, the average price of the new car may rise by about 3000 dollars as a result of these fees, which increases the pressure on the purchasing power of consumers at a time when prices are already witnessing a record rise.

Effects on functions and production

It is expected that the impact of the decision will be directly on many areas in North America.

“If we lose these works, we will become a ghost city,” said John Dagenolo, head of the Ford Motor Press Factory in Windsor, John Dagenolo.

In Canada, the Prime Minister of Ontario, Doug Ford, warned that the fees may lead to the loss of more than 500,000 jobs in the province, many of which are in the auto sector.

On the other hand, the difficulty facing manufacturers in the United States to fully resettle production within the country is increasing, and Trump promised his campaign.

General Motors said that the transfer of production will not be a viable step unless it is logical in the long run.