Detroit auto experts assess outlook after Trump's threatened tariffs against Mexico, Canada are postponed
DETROIT — After talks with Mexican President Claudia Sheinbaum, President Trump announced he would postpone a 25% tariff on Mexico. The tariff was expected to begin at midnight Monday night. Late Monday afternoon, a similar postponement was announced over a threatened tariff on Canada.
John McElroy, with Autoline, says talk of tariffs has dominated the automotive world, with many wondering what the economic impacts would be, Mexico being the focus of the automotive industry.
"Right now, he sure got everyone's attention. I can tell you that right now ... this is the only thing anyone in the industry is talking about is these tariffs," John McElroy, with Autoline, said. "We get a lot more cars and components from Mexico than we do from Canada, so the tariff would have impacted Mexico more. And if you are going to apply tariffs on all the imported components and cars coming in the country, car prices are only going to go up."
The Trump Administration announced it would pause the 25% tariff on Mexico pending further negotiations, which leads McElroy to believe they may not happen after all.
"From the beginning, I thought — I was hoping, actually — that these threats of tariffs were more of a bargaining tactic, a negotiating ploy to get what Trump really wants, which is less legal immigration and less fentanyl coming into the country. It looks like it's starting to come through with what Trump wanted. And if Canada does the same, the president could declare victory and say we don't need the tariffs anymore," McElroy explained.
Trump has demanded that Mexico and Canada play a greater role in securing the borders and give the U.S. more favorable trade deals.
Meanwhile, McElroy said he understands the strategy and hopes the tariffs are not needed.
"Well look, we really don't know what's going to happen. Things are changing by the hour. Here is gonna be very difficult to try to predict what's going to happen until we see the dust settle a little bit here," McElroy said.