The introduction of a 25% tariff on imports from Canada and Mexico poses severe risks for Detroit's Big Three automakers—Ford, GM, and Stellantis, according to Barclays analysts. Their analysis suggests that if automakers do not adjust their pricing or production plans, nearly all profits could be wiped out. The interlinked nature of the US auto supply chain, where components frequently cross borders, means that the tariffs will have a broad impact on the industry. Automakers may end up raising car prices significantly in response to these tariffs.
In short, without any adjustment from automakers (i.e., no price increase, no adjustment in production plans), we estimate it could wipe out effectively all profits for the Detroit Three.
The import taxes could see car prices rise by as much as 25%, impacting all automakers as car components often cross the border multiple times during production.
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