Tariffs imposed by President Donald Trump on Canada and Mexico could have dire consequences for Alabama’s auto manufacturing industry.
The 25-percent tariffs, which are set to go into effect on Tuesday, will likely lead some auto manufacturers, including Toyota and Honda, to almost immediately shut down production at plants in both Canada and the U.S. Both Honda and Toyota have manufacturing facilities in Alabama.
David Adams, president of the Global Automakers of Canada trade group, said in a statement late Saturday evening that the tariffs signed by Trump would “quickly cause” auto manufacturers on both sides of the border to halt production, as manufacturers got a handle on parts price increases and reevaluated where vehicle productions should be based.
Adams’ trade group represents both Toyota and Honda. Both companies have large, 4,000-plus-employee manufacturing plants in Alabama – the Mazda-Toyota plant in Huntsville and the Honda Alabama plant in Lincoln. The plants and related supplier companies represent billions of dollars to Alabama’s economy.
As of late Sunday afternoon, employees at the plants had not received notice of potential shutdowns or work interruptions. Company officials did not immediately respond to a request for more information.
Regardless of the effect on Alabama’s auto industry, the tariffs – and the resulting trade war between the U.S. and two allies – are certain to cause problems for American consumers who largely voted for Trump based on his promises to quickly reduce prices on a variety of goods. Roughly 60 percent of all U.S. imports flow across those two borders, and 25-percent price increases on those goods are certain to push up prices for nearly all Americans.
That’s not to mention Trump’s 10-percent tariff on Canadian oil, which experts said will certainly raise prices at the pump.
Additionally, both countries retaliated to the tariffs, announcing equally stiff tariffs on a variety of U.S. goods, such as whiskey from Tennessee and oranges from Florida. Those taxes will dramatically cut into sales of those products, since Canada is one of the largest importers of U.S.-made goods and produce, including vegetables grown in Alabama.
On Sunday, in a rambling social media post, Trump acknowledged what economists and trade experts had long warned – his tariffs will push up prices on American consumers and cause “pain.”
“Will there be some pain? Yes, maybe (and maybe not!),” Trump wrote. “But we will make America great again and it will all be worth the price that must be paid.”
During the presidential campaign, Trump’s opponent, Kamala Harris, warned that the tariffs would be “tax on the American family,” potentially costing households $4,000 per year more for the same goods. Should the 25-percent tariffs on Canada and Mexico remain in place long term, that estimate from Harris would be low.
