Auto giants with industrial layout in North America have been facing a severe threat in recent days.

Because, on February 1, local time, US President Trump signed an executive order announcing a 25% tariff on goods exported to the United States from Canada and Mexico.

Although the reason behind the tax has nothing to do with the automotive industry - it is because of an opioid called "fentanyl".

Trump claimed that if Canada and Mexico cannot effectively curb the flow of this drug, which can kill humans with just 2 mg, into the United States, a 25% tariff will be imposed on all goods imported from these two countries.

On February 3rd local time, less than 48 hours after he officially announced the tariffs, Trump decided to postpone the imposition of tariffs on Canada and Mexico for 30 days.

On January 31, 2025, local time, in Washington, D.C., U.S. President Trump signed a series of executive orders to impose tariffs on multiple categories of imported goods.

However, if the tax is still imposed after the deferral period, the global automotive industry will suffer a significant impact.

According to data from the Mexican Automobile Industry Association (AMIA) and the Canadian Automobile Manufacturers Association, about 90% of the two countries' automobile exports are destined for the US market. German automakers warned that this move would increase the cost of car purchases for American consumers.

At present, the main vehicle manufacturers with layout in Canada and Mexico are as follows:

Audi produces the Q5 model at its San Jose Chiapa plant in Mexico, with production of 176,000 units in 2023, exports of nearly 40,000 units to the United States in the first half of 2024, and more than 5,000 employees.

BMW produces the 3 Series, 2 Series Coupe and M2 models at its San Luis Potosi plant in Mexico, mainly for the US and global markets; it plans to start production of the Neue Klasse electric vehicle series in 2027.

Ford has an engine plant in Chihuahua, Mexico, and assembly plants in Cuautitlán and Hermosillo. It will export 196,000 vehicles to North America (90% to the United States) in the first half of 2024. Ford's Oakville plant in Canada plans to start producing fuel-powered large F-series pickups in 2026.

GM will import about 750,000 vehicles from Canada and Mexico to the United States in 2024, mainly Chevrolet Silverado and GMC Sierra full-size pickups and mid-size SUVs produced in Mexico; its Mexican plant also produces the electric version of the Equinox and Blazer SUVs. GM's three plants in Canada produce electric trucks, Chevrolet Silverado and V8 engines/dual-clutch transmissions (for global supply).

Honda, which sells 80 percent of its Mexican production to the United States, said in a statement it would consider moving production capacity if tariffs become prolonged.

JAC Motors and Giant Motors of Mexico have a joint venture to assemble JAC-branded models.

Kia Motors' Mexican plant produces Kia brand models and OEMs the Hyundai Santa Fe SUV (exclusively for the United States).

Mazda plans to export 120,000 vehicles from Mexico to the United States in 2024, and said it may adjust subsequent investments if tariffs are imposed.

Nissan produces the US versions of Sylphy, Versa and Kicks at its two factories in Mexico, with production reaching 505,000 vehicles in the first three quarters of 2024.

Stellantis Group produces Ram pickups and trucks at its Saltillo plant in Mexico and Jeep Compass SUVs at its Toluca plant. Chrysler models are produced at its Windsor plant in Canada, and the Brampton plant is expected to start production of new Jeep models in 2025 after renovation.

Toyota's two factories in Mexico specialize in the production of the U.S. version of the Tacoma pickup truck, with sales of 230,000 units in 2023 (accounting for 10% of the U.S. market), and production capacity has been fully transferred to Mexico.

Volkswagen's Puebla plant in Mexico is one of the group's largest production bases, with a production capacity of 350,000 vehicles (including Jetta, Tiguan and Taos models) in 2023, all of which will be exported to the U.S. Last year, Volkswagen invested 7 billion Canadian dollars in Canada to build a battery super factory in Ontario, which is scheduled to start production in 2027 to supply North American electric vehicles.

In addition, many core component suppliers have set up factories in Canada and Mexico.

Autoliv, the world's largest airbag/seatbelt manufacturer, has about 15,000 employees in Mexico; Michelin has three factories in Querétaro and León, Mexico, and Canada; Yanfeng Automotive Trim's factory in Mexico provides seats for GM, Toyota, etc. In addition, Pirelli, Brembo and other suppliers also have layouts.

Tesla also pushed Chinese suppliers to build factories in Mexico in 2023 to provide support for its planned factory in 2025, but the relevant plan has not yet been implemented. The current tariff risk may further delay the localization of its North American supply chain.

As soon as the decision was made, the stock market reacted. On February 3, the share prices of Japanese and Korean automakers and their suppliers fell in the Asian market as exporters in these regions were hit by the new policy. The share prices of automakers such as Toyota, Nissan and Honda all fell sharply, with Honda falling by more than 7%. At the same time, the share price of South Korean Kia Motors, which has a factory in Mexico, also fell by nearly 7%.

Industry insiders analyzed that the imposition of tariffs not only violates the US-Canada-Mexico Trade Agreement and relevant WTO regulations, but in the long run, automakers may accelerate the transfer of production capacity to Asia or Europe to avoid tariff risks, which will lead to the hollowing out of the US manufacturing industry.