How Canada/Mexico Tariffs Would Harm the US Auto Industry (and American Car Buyers)

Bad news! Some auto parts criss-crosses borders multiple times. Will the new tariffs be applied cumulatively?

"... decades of free trade have caused the US, Canadian, and Mexican automotive industries to be highly integrated, with producers in all three countries shipping finished goods and parts across the United States’ northern and southern borders. ...

The North American automotive supply chain is so interwoven across all three USMCA countries that an engine, transmission, or other automotive component might cross the US-Canada and US-Mexico borders as much as seven or eight times before it ends up in a finished vehicle. As a 2017 Bloomberg report documented, this dynamic applies not just to complex parts but relatively simple ones too. In particular, the authors tracked the journey of a capacitor, a simple electrical component in a circuit board, incorporated into a car seat. As Figure 6 shows, by the time the capacitor was embedded in a finished seat, it had already crossed from one North American country to another four times. ..."

Seven Charts Showing How Canada/Mexico Tariffs Would Harm the US Auto Industry (and American Car Buyers) | Cato at Liberty Blog