Carmakers brace for new tariffs in major manufacturing hubs.
Almost all major carmakers manufacture vehicles in Mexico, including popular models like the Toyota Tacoma pickup, Chevrolet Silverado pickup and BMW 3 Series sedan, but some are more vulnerable that others to pronounced price hikes should the tariffs go into effect on Aug. 1.
European carmakers like Volkswagen will be among the hardest hit. The company manufactures ID.4 electric vehicles and Atlas sport utility vehicles in Chattanooga, Tenn., but all the other models it sells in the United States are manufactured in Mexico or Europe.
It remains unclear if Mr. Trump's new tariffs will apply to parts that are manufactured in the United States and installed in vehicles in Mexico, which is also a major supplier of motors and other car components. The administration had previously said that companies could subtract the value of those parts when calculating tariffs. If that remains the case, the impact on prices may be less severe.
European automakers have also lobbied to receive credit for cars they make in the United States and sell abroad. BMW, for instance, exports much of the output from its factory in South Carolina. Mercedes-Benz exports sport utility vehicles made in Alabama.
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