The Trump tariffs are having a significant impact in Mexico, with a well-known car brand likely to transfer its production outside the country. President Trump has threatened to impose tariffs on Mexico and Canada, which could affect the results of American automotive companies and increase the prices of SUVs and trucks for US consumers.
As a result, many iconic brands are making important decisions. One of the most popular brands, General Motors (GM), is evaluating the possibility of moving part of its production from Mexico to the United States. This situation generates uncertainty, especially in the state of Guanajuato, where the GM plant in Silao is a key economic pillar.
The Silao plant, known for manufacturing high-volume trucks such as the Chevrolet Silverado and the Sierra GMC, is an economic engine in the region, generating thousands of direct and indirect jobs. In addition to supplying the US market, this installation has a strategic scope when exporting to other international markets. However, the imposition of tariffs would put the competitiveness of this plant at risk and damage the supply chains that depend on components produced in Mexico.
It is expected that GM will import more than 750,000 vehicles from Canada or Mexico this year, most of which will be manufactured south of the border. Mexican GM plants also build two of their new most important electric vehicles, battery versions of their SUV EQUINOX AND BLAZER. Those GM and other models are already in the sights of another expected Trump policy: ending a subsidy of 7,500 dollars for electric vehicles.
The closure of the GM plant in Mexico could have significant repercussions. GM uses 125,000 people in North America; a decrease in sales of its cars manufactured in Mexico could damage its profits throughout the region, potentially putting pressure on payrolls on both sides of the border. The increase in tariffs would also serve as a reminder of supply chains, which closely unite the three members of the United States-Canada Agreement. Mexico and Canada represent more than 50% of all auto parts exported to the United States, with a value of almost 100 billion dollars in pieces.
The business of GM electric vehicles could also suffer if Trump and Republicans in Congress repeal or reduce the fiscal exemptions of the Biden era that make these cars and trucks more affordable and give incentive companies to manufacture batteries in the United States. The situation puts the automotive sector in Guanajuato and Mexico in general at risk, but the company reaffirms that it will continue to adapt actively. Meanwhile, governments’ efforts seek to avoid what could be a significant blow to the economy of the region and the future of manufacturing in Mexico.