Tariffs on Canada, Mexico, and China Expected to Have Profound Impact on Global Automotive Industry

A car carrier trailer waits in line next to the border wall before crossing to the United States at Otay commercial port in Tijuana, Baja California state, Mexico, on Jan. 22, 2025.

Guillermo Arias | AFP | Getty Images

DETROIT — Tariffs announced Saturday by the Trump administration of 25% on goods from Canada and Mexico as well as an additional 10% on products from China are expected to have a profound impact on the global automotive industry.

For months, automakers have been taking a "wait-and-see" approach to the Trump administration’s tariff threat. That waiting period is coming to an end and automakers will likely need to implement prior contingency plans to attempt to offset additional costs in the coming weeks and months.

Impact on the Automotive Industry

Depending on the details, the tariffs on Mexico could have the greatest impact on the automotive industry, followed by Canada and then China, depending on the automaker.

"Any tariff action must be followed with a renegotiation of the [United States-Mexico-Canada Agreement], and a full review of the corporate trade regime that has devastated the American and global working class," Shawn Fain, president of the United Auto Workers Union, said in a statement.

Automaker Reactions

General Motors and other major automakers did not immediately respond for comment regarding the tariffs Saturday night. Others such as Ford declined to comment, while Honda issued a broad statement: "North American auto trade is key to the success of Honda globally and we look forward to a swift resolution that provides clarity and stability throughout the region."

Most major automakers have factories in the U.S. However, they still rely heavily on imports from other countries including Mexico to meet American consumer demand.

Tariffs and the Industry

A tariff is a tax on imports, or foreign goods, brought into the United States. The companies importing the goods pay the tariffs, and some fear the companies would simply pass any additional costs on to consumers — raising the cost of vehicles and potentially reducing demand.

The formal announcement provides some clarity for companies but could cost automakers, many of which have produced vehicles without tariffs in Canada and Mexico for decades, billions of dollars.

Uncertainty and Contingency Plans

Uncertainty about trade took a toll on GM on Tuesday, when the automaker’s stock had one of its worst days in years even after it beat Wall Street’s expectations for its 2025 guidance and its top- and bottom-line for the fourth quarter.

"Our key take from GM’s 4Q [earnings] result is that while the opportunity for GM is highly compelling, US policy uncertainty must be navigated for the time being," Barclays analyst Dan Levy said in an investor note Wednesday.

GM did not account for potential tariffs in its guidance, which CFO Paul Jacobson described as a "cautious" approach given no duties on North American goods had been implemented yet.

Impact on Earnings

Wells Fargo estimates that 25% tariffs on Mexico and Canada imports would cost the traditional Detroit automaker billions of dollars a year. The firm estimates the impact of 5%, 10% and 25% tariffs on GM, Ford Motor, and Chrysler parent Stellantis would collectively be $13 billion, $25 billion and $56 billion, respectively.

S&P Global Mobility, formerly IHS Markit, estimates a 25% duty on a $25,000 vehicle from Canada or Mexico would add $6,250 to its cost — some if not most of which could be passed on to the consumer.

Automakers Most at Risk

S&P Mobility reports plants in Canada and Mexico produce roughly 5.3 million vehicles, with about 70% — nearly 4 million — destined for the U.S.

Mexico accounted for a majority of those vehicles, as five automakers — Ford, GM, Stellantis, Toyota Motor, and Honda — produced only an estimated 1.3 million light-duty vehicles in 2024 in Canada, largely for the U.S. market, according to a Canadian manufacturing nonprofit research group.

Conclusion

The tariffs announced by the Trump administration are expected to have a profound impact on the global automotive industry. Automakers will need to implement prior contingency plans to attempt to offset additional costs in the coming weeks and months. The industry is deeply integrated between the countries, with Mexico importing 49.4% of all auto parts from the U.S. In turn, Mexico exports 86.9% of its auto parts production to the U.S.

FAQs

Q: What are the tariffs announced by the Trump administration?
A: The tariffs are 25% on goods from Canada and Mexico, as well as an additional 10% on products from China.

Q: How will the tariffs impact the automotive industry?
A: The tariffs are expected to have a profound impact on the global automotive industry, with automakers likely to implement prior contingency plans to attempt to offset additional costs.

Q: Which automakers are most at risk from the tariffs?
A: Volkswagen, Nissan, Stellantis, GM, Ford, Honda, Toyota, and Hyundai are the automakers most exposed to tariffs on vehicles imported from Mexico, based on the percentage of their U.S. sales being produced south of the border.

Q: What is the estimated impact of the tariffs on automaker earnings?
A: Wells Fargo estimates that 25% tariffs on Mexico and Canada imports would cost the traditional Detroit automaker billions of dollars a year. The firm estimates the impact of 5%, 10% and 25% tariffs on GM, Ford Motor, and Chrysler parent Stellantis would collectively be $13 billion, $25 billion and $56 billion, respectively.

New York City Office Space Demand Reaches Pre-Pandemic Levels

Record Demand in the Fourth Quarter

Demand for New York City office space has finally returned to pre-pandemic levels, driven by an influx of new workers as well as a drive by employers to see current workers return to the office. According to VTS, which measures demand through unique new tenant tours of properties, office demand in the city jumped 25% from the year before in the fourth quarter.

Unique Cultural and Economic Dynamics

"New York City’s shift back to in-office work reflects the city’s unique cultural and economic dynamics, especially in the finance and tech sectors," said Nick Romito, CEO of VTS, in a news release.

Tightening Office Market

SL Green Realty Corp, a real estate investment trust, or REIT, concentrated in Manhattan office and retail, released earnings last week. While it missed revenue expectations, analysts pointed to further tightening in the office market as leasing demand accelerates.

New Job Creation

On a call with analysts, SL Green Realty CEO Marc Holliday noted that the city’s Office of Management and Budget is forecasting about 38,000 new office-using jobs in 2025, mostly stemming from finance, business services, and information technology. "That translates into millions and millions of square feet of new absorption for each one of those bodies, and those are not work-from-home bodies for the most part," said Holliday.

Strong Demand Expected

"Combine that with the fact that on-site attendance is rising every month as companies are calling people back to the office four and five days a week. We expect to see very strong demand for office space throughout 2025," Holliday added. SL Green ended the year at 92.5% occupancy, and is projecting more than 93% leased occupancy over the coming year.

Tech Giant Expands Presence

Tech giant IBM recently signed a 92,663-square-foot expansion lease with SL Green at One Madison Avenue, increasing IBM’s total footprint at the property to more than 362,000 square feet. "The expansion of IBM’s flagship office at One Madison Avenue reaffirms a long-standing commitment to advance the technology sector in New York City and New York State, with a vibrant and collaborative workspace designed to bring employees, clients, and partners together from around the world," said Joanne Wright, IBM senior vice president for transformation and operations.

Improving Markets

New York is the clear winner in the office recovery, but VTS notes other improving markets. San Francisco saw a 32% annual growth rate in demand, a faster growth rate than New York’s, though it was starting at a much weaker position. Seattle and Chicago saw growth rates of around 15% each as employers in those cities increasingly embrace hybrid work models that require consistent in-office presence.

National Picture

The data shows that while some markets, like New York City, are rapidly returning to traditional office settings, the national picture reflects slow but steady progress. Nationally, demand in the fourth quarter was up 12% from the previous quarter. Historically, demand declines from the third quarter to the fourth quarter. "This growth is notable — not only for defying seasonal expectations, but for emerging in the midst of a cooling labor market. Businesses appear more willing to invest in office space despite economic uncertainty, signaling a shift in confidence and long-term planning," said Ryan Masiello, chief strategy officer of VTS.

Conclusion

The data suggests that the office market is experiencing a strong recovery, with New York City leading the way. As more companies commit to in-office work, the demand for office space is expected to continue to rise.

Frequently Asked Questions

Q: What is the current state of the office market in New York City?
A: The demand for office space in New York City has finally returned to pre-pandemic levels, driven by an influx of new workers and a drive by employers to see current workers return to the office.

Q: What are the key industries driving job growth in New York City?
A: The finance, business services, and information technology sectors are expected to drive job growth in New York City, with 38,000 new office-using jobs forecasted in 2025.

Q: What is the current occupancy rate for SL Green Realty Corp?
A: SL Green ended the year at 92.5% occupancy and is projecting more than 93% leased occupancy over the coming year.

Q: What is the current state of the office market nationally?
A: Nationally, demand in the fourth quarter was up 12% from the previous quarter, defying seasonal expectations and emerging in the midst of a cooling labor market.

The Importance of Diversity in Political Hiring

Diversity in political hiring is crucial for creating a more representative government that truly reflects the needs and concerns of the people. However, the reality is that many political campaigns continue to struggle with diversity, leading to a lack of representation and a disconnect between the government and the people. In this article, we will explore the strategies for increasing diversity in political campaigns and breaking down the barriers that prevent it.

Understanding the Challenges

Historical and Structural Barriers

The lack of diversity in political hiring is not a new phenomenon. Historically, political campaigns have been dominated by white, affluent, and well-connected individuals, making it difficult for people from diverse backgrounds to break into the system. This has led to a lack of representation and a lack of understanding of the needs and concerns of marginalized communities.

Biases and Stereotypes

Biases and stereotypes also play a significant role in the lack of diversity in political hiring. Many political campaigns rely on traditional networks and connections, which can lead to a lack of diversity in candidate selection. Additionally, biases and stereotypes can prevent candidates from diverse backgrounds from being taken seriously or given opportunities to showcase their skills and qualifications.

Strategies for Increasing Diversity

Inclusive Hiring Practices

One strategy for increasing diversity in political campaigns is to implement inclusive hiring practices. This can include using blind hiring processes, where candidates’ names and addresses are removed from their applications, and using a diverse pool of interviewers. Additionally, campaigns can use objective criteria, such as skills and qualifications, when selecting candidates.

Diverse Candidate Selection

Another strategy is to actively seek out candidates from diverse backgrounds. This can include targeting historically underrepresented communities, such as women, people of color, and individuals with disabilities. Campaigns can also use social media and other outreach efforts to attract a diverse pool of candidates.

Mentorship and Training

Mentorship and training programs can also help increase diversity in political campaigns. These programs can provide training and support for candidates from diverse backgrounds, helping them to build skills and confidence. Additionally, mentorship programs can connect candidates with experienced campaign professionals who can provide guidance and support.

Measuring Progress

Finally, it is essential to measure progress and track diversity metrics. Campaigns can use diversity metrics, such as the percentage of candidates from diverse backgrounds, to track progress and identify areas for improvement.

Real-Life Examples

The 2020 US Presidential Election

The 2020 US presidential election saw a significant increase in diversity among candidates, with a record number of women and people of color running for office. The campaigns of Democratic candidates, such as Kamala Harris and Tulsi Gabbard, drew attention to the importance of diversity and inclusion in political hiring.

The UK’s Labour Party

In the UK, the Labour Party has made a concerted effort to increase diversity in its hiring practices. The party has implemented blind hiring processes and has targeted historically underrepresented communities, such as women and people of color. As a result, the party has seen an increase in diversity among its candidates and elected officials.

Conclusion

Breaking down barriers and increasing diversity in political campaigns requires a concerted effort and a commitment to inclusivity. By implementing inclusive hiring practices, seeking out diverse candidates, providing mentorship and training, and measuring progress, campaigns can create a more representative government that truly reflects the needs and concerns of the people. As we move forward, it is essential that we continue to prioritize diversity and inclusion in political hiring, ensuring that our government truly represents the diverse needs and concerns of our communities.

FAQs

Q: What are some strategies for increasing diversity in political campaigns?

A: Some strategies for increasing diversity in political campaigns include implementing inclusive hiring practices, seeking out diverse candidates, providing mentorship and training, and measuring progress.

Q: How can campaigns attract a diverse pool of candidates?

A: Campaigns can attract a diverse pool of candidates by targeting historically underrepresented communities, using social media and other outreach efforts, and providing training and support for candidates from diverse backgrounds.

Q: What are some challenges to increasing diversity in political campaigns?

A: Some challenges to increasing diversity in political campaigns include historical and structural barriers, biases and stereotypes, and a lack of understanding of the needs and concerns of marginalized communities.

Q: Why is diversity in political hiring important?

A: Diversity in political hiring is important because it helps to create a more representative government that truly reflects the needs and concerns of the people.