Another year, another difficult landscape for automakers to navigate. The new US federal administration has threatened to impose across-the-board tariffs on goods from Canada and Mexico starting February 1, which could impact a range of new vehicles assembled in those countries. Given that the proposed tariffs could be as high as 25 percent, they could make some very popular cars much more expensive. So we thought it was a good time to go through the list of vehicles built in Canada and Mexico for the US market to see what could be directly affected as entire products.
First, a little overview of what a tariff is and how it works. A tariff is a form of taxation on imported goods paid to the government by companies importing those goods into America. This additional expense makes the landed cost of imported goods subject to customs duties more expensive, eating into profits. To maintain profit margins, companies that import products typically respond to tariffs by raising the prices of affected imported products, meaning that U.S. consumers will end up paying for the tariffs put in place by the federal government.
Historically, tariffs have been used for purposes such as supporting industry, combating potential dumping (selling products in another country for less than they cost to manufacture), as tools in trade wars or within the framework of economic sanctions. A long-standing example is the chicken tax on imported light trucks, which was put in place in retaliation for tariffs imposed by France and Germany on American chickens in 1964. A more recent example is the 100% customs duty imposed on electric vehicles manufactured in China. in response to allegations of dumping.
Let’s start in northern Canada, where many automakers build cars for America. Cars like the Dodge Charger, Chrysler Pacifica and Chrysler Voyager, three (although really only two) Stellantis products built across the Detroit River from America in Windsor, Ontario. In fact, the Windsor assembly plant is the only facility where these cars are manufactured, meaning Stellantis would not be able to pivot quickly if the proposed tariffs hit Canada. Compared to Stellantis, General Motors is in a better position. Although the BrightDrop family of electric step vans is manufactured in Ingersoll, Ontario, they are not high-volume products. The only other vehicles GM assembles in Canada are full-size pickup trucks, but the General also builds Silverados and Sierras in Michigan and Indiana, so a pivot is theoretically possible. As for Ford, since Oakville Assembly isn’t building anything, the only blue oval vehicle coming out of Canada soon is the Mustang GTD, hand-assembled at Multimatic’s Markham, Ontario facility.
However, domestic automakers aren’t the only ones at risk of potential tariffs on products imported from Canada. Almost all Lexus RX and NX crossovers sold in America are built in Cambridge, Ontario. Just off the highway in Woodstock, Ontario, Toyota builds non-hybrid RAV4 crossovers for the U.S. and Canadian markets. Given that America purchased 475,193 RAV4s last year, of which 235,744 were non-electrified, the impact of tariffs on this model would be significant.
Speaking of Japanese automakers, Honda has a major assembly complex in Alliston, Ontario that makes two models. Every Civic sedan destined for the U.S. market is built there, and while hatchback models should avoid potential tariffs, the majority of Civic sales could be affected. As for the Honda CR-V, it may or may not become more expensive if the tariffs apply in Canada, mainly due to the fact that Honda builds CR-Vs for the North American market, in Canada and Indiana. It’s possible that Honda will spread the cost of potential tariffs across all CR-Vs sold in America, but it’s also possible that the production mix will also be changed to minimize exposure.
However, Canada is small potatoes compared to the manufacturing presence of automakers in Mexico. Another country threatened by tariffs, automakers have flocked to Mexico during the NAFTA and USMCA era, meaning a ton of different cars built in Mexico could become much more expensive if general tariffs were introduced. Let’s start again with Stellantis, which has two different assembly complexes south of the border. Every heavy-duty Ram pickup truck is built in Saltillo, and the U.S.-market Ram Promaster pickup truck comes out of a separate factory in the same complex. About a ten-hour drive south of Toluca, every Jeep Compass sold in North America and every Wagoneer S sold in the world is built.
As for General Motors, buckle up, because the list is about to get long. The company’s Ramos Arizpe Assembly Plant builds the gasoline-powered Chevrolet Blazer, Chevrolet Blazer EV, Chevrolet Equinox EV and Honda Prologue. It’s the only North American assembly plant for the combustion-powered Blazer and the only plant in the world for the three aforementioned Ultium electric vehicles, meaning it plays a critical role in GM’s big push in terms of electric vehicles. Since we’re talking about GM, the gas-powered Chevrolet Equinox and GMC Terrain are exclusively built in San Luis Potosi, and given that the Equinox is Chevrolet’s most popular non-truck vehicle in America, the potential tariffs could have a significant impact on sales. . Finally, GM also makes full-size trucks at Silao, but given that Silao is one of four plants in North America that make these trucks, the potential costs to consumers could be lower than models produced exclusively in Mexico , if tariffs came into force.
Ford also makes some popular models in Mexico, but not as much in volume as GM. The Hermosillo stamping and assembly plant is the only plant to build the Bronco Sport compact crossover and Maverick compact pickup truck, and the Cuautitlán assembly plant is the only plant outside of China to build the Mustang Mach-E electric crossover. Tariffs on the Maverick would hit particularly hard because it is the most affordable Ford model in the United States and effectively replaces the Focus compact car.
Mazda is another brand that makes affordable cars in Mexico, with the Mazda 3 compact sedan and hatchback, as well as the CX-30 subcompact crossover being assembled in Salamanca for the North American market. Although these models are also built in Hofu and Hiroshima, Mexican production represents a significant portion of the U.S. product line.
However, when it comes to the impact on affordable cars, the tariffs could hit Nissan products harder. The Nissan Kicks, Versa and Sentra are all built in Aguascalientes for the North American market, three reasonably priced vehicles for price-conscious consumers who would certainly feel a pinch if tariffs were implemented. For less price-conscious buyers, Nissan also makes the Infiniti QX50 and QX55 in the same city, but at a different factory.
In fact, this factory is a joint venture with Mercedes-Benz and manufactures the GLB subcompact crossover for almost the entire world. Speaking of luxury cars, BMW builds the 3 Series sedan in San Luis Potosí for North America and the 2 Series coupe including the M2 for the whole world. So if you want the cheapest M car on the market, you might want to act sooner rather than later.
Since we’re talking about German cars, we have to talk about Volkswagen. The brand has been building vehicles in Mexico for a very long time and is currently building four vehicles in Mexico for the North American market. The Jetta, Tiguan and Taos are all built in Puebla, while the Audi Q5 is made in San José Chiapa. Given that Puebla is Jetta’s only factory outside of China, that the Taos is neither built nor sold in Europe, and that the only other factories for the Q5 are one in China and one in India, it does not There is probably no quick pivot for these models. .
A few manufacturers build only one model in Mexico for the U.S. market. For example, every Toyota Tacoma pickup truck sold in North America is produced in one of two Mexican factories. One is in Tijuana, the other is in Apaseo el Grande, and together they make hundreds of thousands of midsize trucks, but this is the only Toyota model coming from Mexico and destined for sales in the United States. Similarly, Honda makes only one model for the U.S. market in Mexico, the popular HR-V subcompact crossover at a plant in Celaya, and the only Kia built in Mexico for the U.S. market is the K4 compact sedan.
Are there automakers building in Mexico that might be best positioned to weather a possible tariff storm? Well, yes. While many Hyundai Tucson compact crossovers continue to be built in Alabama, some have been rolling off the lines at Kia’s Mexican plant since last year. In theory, Hyundai is probably best positioned to revamp production, potentially sending more Mexican-made Tucsons to Canada.
Phew, that’s an incredibly long list of models that could be affected by possible tariffs, and we haven’t even discussed vehicles using engines built in Canada or Mexico. It’s safe to say that if the threatened blanket tariffs take effect as announced on February 1, the U.S. automotive landscape could look very different in terms of availability and affordability. Given that new cars are already very expensive, the best possible outcome for American consumers is some sort of deal to avoid a trade war.
(Photo credits: Dodge, Lexus, Honda, Ram, Chevrolet, Ford, Nissan, Mercedes-Benz, Volkswagen, Toyota, Hyundai)
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