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Why tariffs could mean expensive trouble for the U.S. auto industry

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The North American auto industry supply chain is spread across three countries. Will car parts be taxed 25% every time they cross a border?
The article from Marketplace discusses the potential impact of tariffs on U.S. automakers and the auto industry, particularly in relation to trade with Mexico and Canada under the North American Free Trade Agreement (NAFTA). It highlights how the Trump administration's proposed tariffs on imported vehicles and parts could disrupt the integrated supply chains that have developed over decades. These tariffs could lead to higher costs for U.S. manufacturers, potentially reducing their competitiveness and affecting jobs in the auto sector. The piece also touches on the ongoing negotiations to modernize NAFTA, now known as the USMCA (United States-Mexico-Canada Agreement), and how these trade policies could influence future automotive production strategies, including the shift towards electric vehicles and the implications for cross-border trade. The article underscores the complexity of the automotive industry's reliance on international trade and the potential economic repercussions of protectionist policies.

Read the Full Marketplace Article at:
[ https://www.marketplace.org/2025/01/21/tariffs-us-automakers-auto-industry-cars-mexico-canada-nafta/ ]