Many have speculated that with the new Section 232 steel and aluminum tariffs on imports imposed by the Trump Administration, prices for US manufactured goods will increase. Recent studies indicate that the two tariffs are expected to add approximately $300 to the price of each vehicle.
Given the integrated nature of the Canadian, Mexican and US economies, especially, in regards the automotive industry, the exemption to both countries within the recent tariff announcement is a welcome relief for many in the industry.
Although, the difficult negotiations in the latest round of talks which ended in early March along with recent statements made by both Canada's and Mexico's North American Free Trade Agreement (NAFTA) negotiator’s that they will not be “bullied into accepting NAFTA terms as a result of President Trump's steel tariffs” puts the future of NAFTA in uncertain territory. President Trump has previously threatened to pull out of NAFTA “if better terms to the US” are not possible. A departure from the cost advantages from the NAFTA agreement would result in a substantial increase to vehicle prices for US consumers.