President Trump’s 25% tariffs on goods from Mexico and Canada took effect first thing Tuesday. The American auto industry will be hit hard by these tariffs since many parts and materials come from Mexico and Canada. WSJ’s Mike Colias and a U.S. a uto parts supplier talk about the impact of the tariffs. Further Listening: -Trump’s Tariff Whiplash -How One Business Is Getting Ahead of Trump’s Tariffs Further Reading: -Auto Executives Try to Sway Trump on Tariffs, EV Subsidies -Tariff Threat Prompts Automakers to Find New Suppliers, Consider Higher Prices -Canada and Mexico Gambled on a Free Trade Future. The Bet Is Turning Sour. Learn more about your ad choices. Visit megaphone.fm/adchoices
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My name is Thomas Koval. I am the CEO of Leggera Technologies. I live in Rochester, Michigan, not far from Detroit, the center of automotive industry.
Thomas's company makes parts for vehicles, things like the shelves inside Amazon vans and those spare tire holders at the back of Jeeps and Ford Broncos. How long have you worked in the automotive industry?
I've actually worked in automotive industry my entire life since I was 16 years old. I started working in factories in Germany and I'm originally from Sweden. I'm a big fan of Detroit and I'm a big fan of the auto industry.
How much of your production is in the U.S. and how much is outside of the U.S. ?
All our production is in the U.S. However, we do have material coming in from other countries. We have material coming from Mexico.
As of today, those materials will be subject to a new 25% tariff.
tariffs, 25 percent on Canada and 25 percent on Mexico, and that'll start. So they're going to have to have a tariff. So what they have to do is build their car plants, frankly, and other things in the United States.
President Trump has said these tariffs are necessary to fight fentanyl trafficking and illegal migration, as well as to build up U.S. manufacturing.
It's a very unpredictable time right now, and it's a very, very tough time. We don't know where these tariffs are going to go, so we're going to have to deal with that. But the question is, how long will it last for? So a company like ours, we've built up inventory to try to see if this is only going to last for two weeks, we're going to be fine. But after that, what happens?
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