The United States imposes tariffs on imported goods from Mexico, and the automobile industry has the greatest impact. Toyota estimates that the main transaction target for supplying parts to Toyota will cost an additional $1.07 billion.

Japanese automakers have used the North American Free Trade Agreement (NAFTA) to establish an automotive industry chain from parts to vehicles throughout North America. To increase tariffs now, it will definitely affect the entire industrial chain.

Reuters quoted Bob Carter, Toyota’s North American sales director, as an email to North American distributors stating that Toyota’s major parts suppliers could be taxed between $215 million and $1.07 billion.

Stepping up the procurement of key parts

The email also pointed out that 65% of Toyota’s Pickup Truck Tacoma, which is planned to be sold in the US this year, is produced in Mexico. The Kyodo News also pointed out that the Toyota small car YARiS produced by Mazda will also be affected.

Some automakers pointed out to Reuters that major automakers have planned to postpone the export of some cars from Mexico and are stepping up their procurement of key parts.

LMC Automotive, a market consultancy, points out that the US initially imposes a 5% tariff and the auto industry can handle it. However, if it is added to 25% later, it will seriously damage the automobile industry and reduce the sales of new cars in the United States by 1.5 million.

In addition to Toyota and MasterCard, Nissan also produces cars in Mexico.

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