Background on the Importance of Mexican Auto Parts for the US
The United States imports a substantial amount of steel and aluminum auto parts from around the world, with Mexico playing a crucial role. In fact, Mexico accounts for 38.99% of the total steel and aluminum auto parts imported by the US, while Canada represents 20.55%. Combined, these two countries make up 59.54% of the US’s total auto part imports.
Tariff Details and Estimated Impact
A 50% tariff imposed on steel and aluminum auto parts from Mexico, as decided by President Donald Trump, is expected to have a significant impact on the US auto parts and vehicle industry. Julio Galván, economic studies manager at the National Association of Auto Parts Industry (INA), estimated that this tariff will increase costs for auto parts and vehicles in the US, affecting the competitiveness of the North American region.
2024 Import Data and Tariff Calculation
In 2024, the US imported $12,577 million worth of auto parts containing steel and aluminum from Mexico. With the 50% tariff, an additional $6,289 million in costs will be incurred, depending on the percentage of steel and aluminum content in each part.
- $11,959 million of these imports were aluminum auto parts from Mexico.
- $618 million were steel auto parts imported from Mexico.
- Together, these two categories account for 14% of total Mexican auto part exports to the US, valued at $12,577 million. With a 50% tariff, the potential impact could reach $6,289 million.
Consequences for the US and Mexican Industries
The increased tariffs will significantly elevate the costs of steel and aluminum, directly affecting US auto part and vehicle prices as well as delivery times. This situation will severely compromise the supply chains within the North American region, which operate under “just-in-time” production schemes.
The inability to meet established delivery times for components will jeopardize the operational continuity of the entire automotive industry in the region, putting vehicle development at risk and impacting exports.
Key Questions and Answers
- What is the significance of Mexican auto parts for the US? Mexico accounts for 38.99% of the total steel and aluminum auto parts imported by the US, making it a crucial supplier.
- What is the estimated impact of the 50% tariff on US auto parts industry? The National Association of Auto Parts Industry (INA) estimates a $6,289 million impact on the US auto parts and vehicle industry in 2024.
- How will the tariff affect supply chains in North America? The increased costs and delivery delays caused by the tariff will severely compromise supply chains within the North American region, potentially jeopardizing the operational continuity of the automotive industry.
