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Trump Casually Announces More Tariffs On Autos. Possibility Of Assembly Line Production Halt In U.S. [1]

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Date: 2025-02-19

Not shockingly, Trump casually announced more tariffs last Friday on automotive parts imports. Why not shockingly? It’s because this is Trump’s MO: chaos that puts entropy to shame. The latest announcement comes on the heels of postponed tariffs on Canada and Mexico that are to kick in next month. The latest tariffs on auto parts would go into effect on April 2nd. If all these tariffs go into effect, it could lead to shutting down production at several of the foreign owned auto plants in the U.S.

And some of those foreign owned production facilities are in red states.

AUTOMAKERS ANXIOUS: Trump ramped up his trade threats on Friday, vowing to slap tariffs on hundreds of billions of dollars worth of auto imports as soon as April 2 — a move that could upend supply chains, drive up costs, and wallop an already fragile industry. “Maybe around April 2,” Trump said during an executive order signing ceremony in the Oval Office when asked about new tariffs on automotives, a date confirmed by an adviser… That includes 25 percent tariffs on all steel and aluminum imports, a flat 25 percent tariff on Canada and Mexico planned for next month, and reciprocal tariffs on all U.S. trading partners. The mounting uncertainty is already forcing automotive companies to mull price increases, shifting manufacturing away from the United States and delaying investment in new facilities, automotive insiders tell Morning Trade. The industry’s shrinking profit margins also means that any additional costs — whether from supply chain disruptions or rising material prices — could significantly hinder production, potentially bringing it to a screeching halt.

Emphasis is mine.

So the steel and aluminum tariffs will go into effect in March. Trump is definitely going to be hitting the EU and other nations with reciprocal tariffs. Some nations may quicky give Trump a victory and lower their tariffs on autos and other American exports, but I can’t imagine that all of them will have worked out some kind of “deal” with the untrustworthy Trump. And in a couple of weeks, those postponed tariffs on Canada and Mexico are expected to start, unless Canada and Mexico do “something” to placate Trump.

Beats the hell out of anyone if they know what Trump still wants out of both countries.

But now, auto parts are on the tariff hit list. And last time I checked, the U.S. automotive industry relies heavily on Canada and Mexico for auto parts. This will definitely raise the price of cars in the U.S. And it may even halt production at several automotive assembly plants in the U.S.

I do know that Toyota has an assemby plant in my home state of Kentucky. And yes, it is not a foreign car company, but Ford needs those auto parts from Canada and Mexico. And I wouldn’t be surprised if those tariffs hit the Ford truck assembly plant here in Louisville. Therefore, not only would the prices go up for those big ticket items, I don’t believe that Kentuckians would be thrilled with plant closures.

Not that I think most Kentuckians can add 2 + 2 and come up with 4. I’m sure most will still not blame the Orange dictator for those possible nasty outcomes, unless they are going into the dealership for a new truck purchase. But I’m sure they will blame Biden instead.

Another red state that will feel the hammer of Trump’s tariffs is Alabama!

Alabama’s auto industry, which supported nearly 90,000 jobs in 2023, could be significantly impacted by President Donald Trump’s planned tariffs on Canada, China and Mexico… These three countries are in the top five countries of origin for imports coming to Alabama, totaling $15.9 billion in 2023, or about 60% of all imports. The auto industry in the state, built around the Mercedes-Benz plant in Vance, just outside Tuscaloosa; Hyundai in Montgomery and Honda in Lincoln, is a large part of that… In 2023, Alabama imported goods worth $37.1 billion, ranking as the 21st largest importer among the 53 U.S. importers. Nearly all the state’s top imports, including crude petroleum oils ($3.04 billion), spark-ignition reciprocating engines over 1,000 cc ($1.43 billion), various motor vehicle body parts ($1.25 billion), motor vehicle transmissions ($1.01 billion), and ignition and wiring sets for vehicles ($995 million) go toward building new cars.

Ouch.

I’ve said it before, but we should know something here in a few months if Trump is serious about using his “magic wand” of tariffs to destroy the U.S. economy. I’m in the camp that believes Trump is going to test his new toy at least, because he did once before with China. The only questions is how large the damage will be this time.

And yes, Kentuckians and Alabamanians will be suffering from FAFO if even half of Trump’s tariffs come into play.

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