Carmakers’ global focus facing threat
Tariffs-driven trade war may disrupt worldwide system.
Over the past three decades, the global auto industry has gotten, well, more global. Manufacturers built scores of factories outside their home countries to reduce exposure to currency swings, take advantage of cheaper labor and manufacture cars closer to buyers.
BMW makes sport utility vehicles in South Carolina. Toyota Motor Corp. produces sedans in Kentucky. General Motors Co. manufactures pickups in Mexico. Hyundai Motor Co. assembles crossovers in the Czech Republic. And almost everyone is producing more of almost everything in China.
While cars are typically sold in the countries where they’re made, it’s not uncommon for them to also be shipped abroad. BMW, for instance, is America’s top auto exporter, sending some $10 billion worth of vehicles including the X5 SUV to other nations last year.
This system is under threat as the administration embarks on trade wars described as easy to win. Cars are significant contributors to deficits President Donald Trump’s repeatedly said are “very unfair” to the United States, with Germany coming under particularly heavy criticism. But after months of tough talk and threats, the first country whose autos Trump is targeting with tariffs is one the U.S. actually has a surplus with: China.
Here’s a look at the top models automakers imported to the U.S. last year, from the countries that sent America more cars than anywhere else:
Mexico: Hitting vehicles assembled in Mexico with tariffs would deal a significant blow to a segment that might surprise American consumers: Detroit-branded pickup trucks.
Last year, two of the top-selling models imported from the country were GM’s Chevrolet Silverado and heavy-duty versions of Fiat Chrysler Automobiles NV’s Ram pickups. GM is about to add to the flow of Mexican imports by bringing back the Blazer SUV and building it in Ramos Arizpe.
Canada: Japan’s Toyota and Honda Motor Co. would be hit hardest if the U.S. decides to tax autos built by its neighbor to the north. But GM and Fiat Chrysler wouldn’t be spared harm. The Toyota RAV4, Honda CR-V and Chevrolet Equinox are among the top-selling models in America’s booming crossover segment.
Japan: The country’s automakers are sending over hundreds of thousands of hot-selling compact SUVs. Aside from pickups, the Toyota RAV4 was the top model in America last year.
South Korea: Hyundai Motor Co. and Kia Motors Corp.’s plants in Alabama and Georgia insulate the companies somewhat from tariffs, but more than half of the vehicles they sold in the U.S. last year were shipped from their home market.
Germany: While Germany imported the fifthmost vehicles into the U.S. last year, the home of Europe’s biggest economy punches above its weight in attracting Trump’s ire.
Trump has lamented the number of Mercedes-Benz logos he sees prowling Fifth Avenue and criticized Germany this week for snubbing American-made Fords.