How these new tariffs on Mexican imports will impact the U.S.

“So we’re going to tax Americans until Mexico stops allowing people from Central America to exercise their legal right to seek admission to the United States?” (NY Times editorial today).

Two thirds of our imports from Mexico are within the same company, for instance vehicle related manufacturers who often bring together parts made in Mexico, Canada and the U.S. The new tariffs add internal costs to these firms.

22% of GM’s domestic car sales are for cars built in Mexico.  Mexico accounted for about one-third of GM’s production of the trucks.  About 18% of Fiat Chrysler autos were from there.  In all, $52.6 billion of vehicles and $59.4 billion in auto parts came from Mexico. (from here.)

U.S. imports from Mexico rose from 1994 (NAFTA) from $65 billion to around $295 billion in 2016. Exports to Mexico climbed from $68 billion in 1994 to an estimated $235 billion in 2016. Net trade imports from Mexico to the U.S. are overwhelmingly in production of vehicles – total cars and parts for buses, trucks and cars. (go here).

4.9 million American jobs are directly dependent on Mexican trade. These 556,000 jobs in California and 382,000 In Texas.

Leave a Reply