US tariffs could drive up auto costs in Mexico, Canada: Monex Financial Group

MEXICO CITY -- A proposed 25 percent US tariff on auto imports could raise production costs for Mexico and Canada, adding pressure to an already strained global auto industry, Mexico's Monex Financial Group warned Wednesday.

In a sectoral analysis, Monex said recent US tariffs on steel and aluminum imports, imposed on March 12, are already disrupting trade flows and supply chains.

Mexico and Canada together accounted for nearly 40 percent of US steel imports in 2023, and also supply about 29 percent of America's imported vehicles, Monex noted.

An additional 25 percent auto tariff would significantly impact pricing and availability.

For Mexico, the tariffs could hit exports worth 4.7 percent of its total trade and over 1.5 percent of its GDP, according to the report.

Industry estimates suggest the move could add up to 3,000 US dollars to the average cost of a car in the United States, potentially reducing 2025 sales.

Only vehicles meeting the 75 percent regional content rule under the USMCA trade agreement would be exempt.

US President Donald Trump, now in his second term, has threatened broader tariffs on Mexican goods, citing concerns over drug trafficking and migration.