Trump tariffs are stalling investment plans of automakers and part suppliers as they await clarity: Report
The wider US auto industry is in paralysis with no one having any idea on where to invest or how to invest.
Automakers and part suppliers are waiting for clarity on US President Donald Trump’s trade policy before deciding how to proceed with US investments.
“Something concrete has to be put on the table,” a Bloomberg report quoted Volkswagen CEO Oliver Blume as having said during the company’s annual press conference last week.
As of now, the company is primarily looking at options in the US Southeast, according to the report, which added that its previous options were to expand a plant in Tennessee, use a factory it’s planning in South Carolina, or boost operations in Mexico.
Meanwhile, Paslin, which makes assembly lines for car manufacturers, is rethinking how to best utilize a plant it recently opened in Mexico due to the tariff threats.
Ford Motor Co on the other hand is trying to get ahead of levies by shipping as many engines as it can from Canada to the US long before they’re needed.
All of these highlight the disarray within the auto and auto-parts industries as the sector tries to anticipate the fallout from new US tariffs.
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On top of this, the slowdown in the demand of Electric Vehicles (EVs) from Ford and General Motors have led them to cancel orders from their part suppliers, intensifying their financial pressures.
“The industry is in paralysis,” the report quoted Michael Robinet, vice president of forecast strategy for S&P Global Mobility as saying. “No one has any idea where to invest or how to invest."
He added that the situation "is worse than Covid in the sense that there is a lack of a stable planning environment.”
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This is "hurting American jobs,” the report quoted union representative John D’Agnolo as saying, in reference to Trump’s threats to tariff Canadian car parts. “This is going to devastate our industry, sure, but it will devastate the American industry, too.”
