North American vehicle production threatens being cut by a third come next week on Donald Trump’s tariffs against Canada and Mexico, according to S&P Global Mobility.
Around 20,000 fewer units a day would leave production lines under the scenario, S&P’s analysis found, as car makers scramble to mitigate higher costs and muted demand.
Knock-on impacts of the sweeping 25% tariffs, which subsequently prompted retaliation, would worsen were levies not changed or lifted, the analysis, cited by CNBC, added.
“We have a new dawn, to a degree,” S&P Global Mobility Auto Intelligence associate director Stephanie Brinley said, “this is a significant move”.
An average of 63,900 light passenger vehicles were said to be currently produced a day by 25 automakers.
Of these, 65% were built in the US, alongside 27% in Mexico and 8% in Canada, S&P reported.
“I think we’re going to see some plants drop shifts. We’re going to see some plants just slow build rates,” Brinley said.
Shares in automakers were hit on Tuesday, with Ford Motor Company and General Motors Company down 2.2% and 2.8% respectively.