Discover how global companies could be impacted by Trump’s proposed tariffs on Mexico, China, and Canada. Learn about the potential consequences for automakers, electronics manufacturers, and retailers as they navigate the challenges of these trade policies.
In late November 2024, President-elect Donald Trump made a significant pledge to impose tariffs on the United States’ three largest trading partners—Mexico, China, and Canada. This move was part of Trump’s campaign promise to take a more protectionist stance on U.S. trade, with major implications for global companies. The proposed tariffs could trigger trade wars and affect industries that rely heavily on international trade. Below, we highlight some key sectors and companies that are likely to feel the impact of Trump’s proposed tariffs.
Automakers and Trump’s Proposed Tariffs
Trump’s proposed tariffs on imports from Mexico and China could significantly impact automakers, especially those that have established manufacturing operations in these countries.
AUDI
Volkswagen’s Audi plant in San Jose Chiapa, Mexico, produces models such as the Q5, employing over 5,000 people. With nearly 40,000 units exported to the U.S. in the first half of 2024, Audi may face challenges in meeting demand should tariffs increase. The potential cost increases could alter their business model and impact consumer prices in the U.S.
BMW
BMW’s plant in San Luis Potosi, Mexico, produces a variety of models, with the majority exported to the U.S. market. Trump’s proposed tariffs could make these vehicles more expensive in the U.S., reducing their competitive edge in the market.
Honda Motor
Honda exports 80% of its vehicles from its Mexican plant to the U.S. market. Honda’s COO, Shinji Aoyama, has voiced concerns about shifting production if permanent tariffs on Mexican vehicles are imposed. The situation remains uncertain as automakers like Honda navigate Trump’s proposed tariffs and their potential effects on supply chains.
Electronics Manufacturers and Trump’s Proposed Tariffs
The electronics sector, which has long relied on global supply chains, is another major industry that could be disrupted by Trump’s proposed tariffs on China and Mexico.
FOXCONN
Foxconn, the world’s largest electronics contract manufacturer, is constructing an artificial intelligence server factory in Mexico in collaboration with Nvidia. Foxconn’s decision to expand production in Mexico could face challenges if U.S. tariffs are applied to imports, especially given the potential impact on their supply chain for key components.
SAMSUNG ELECTRONICS
South Korea’s Samsung Electronics manufactures TVs and home appliances in Mexico, exporting many products to the U.S. market. Trump’s proposed tariffs could increase production costs for Samsung, potentially leading to higher prices for U.S. consumers and reduced demand for Samsung products.
Impact on the Food & Drink Sector and Trump’s Proposed Tariffs
In addition to the automotive and electronics sectors, the food and beverage industry is also at risk of being affected by Trump’s proposed tariffs.
CAMPARI
Campari, the Italian spirits group, produces tequila at its Mexican facilities and exports a significant portion to the U.S. market. Trump’s tariffs could impact the cost of these exports, ultimately affecting Campari’s bottom line. The company has been closely monitoring the political landscape in the U.S. to gauge the potential effects of these tariffs.
Retailers and Trump’s Proposed Tariffs
Retail companies are already facing uncertainties due to supply chain disruptions, and the potential for increased tariffs on Chinese goods is adding to their concerns.
FIVE BELOW
The discount retailer imports 60% of its products from China, and Trump’s proposed tariffs could make those goods more expensive to source. The retailer has been working with its vendors to adjust and mitigate the effects of these potential tariffs, but the uncertainty remains high.
H&M
Swedish fashion giant H&M imports a significant portion of its products from China. The company has been looking into the risks associated with tariffs and is working to secure its supply chains to minimize the negative impact of Trump’s proposed tariffs on its U.S. operations.
Other Companies Likely to Be Affected by Trump’s Proposed Tariffs
Other sectors, such as packaged goods, retail, and consumer electronics, will also likely feel the effects of Trump’s proposed tariffs. Companies like Procter & Gamble and Unilever, which have major operations in Mexico, could see a rise in the cost of imports into the U.S. These tariffs may force companies to adjust their pricing strategies or find alternative supply chains.