On his first day of the second term, President Donald Trump announced intentions to impose up to 25% tariffs on imports from Mexico and Canada by February 1, 2025, aiming to address unauthorized migration and drug trafficking.

This move has raised alarms within the automotive industry, particularly among manufacturers like Volkswagen, which operates a significant plant in Puebla, Mexico, producing nearly 350,000 cars for the U.S. market in 2023. The company warns that such tariffs could adversely affect American consumers and the global automotive sector.

Analysts suggest that these tariffs might jeopardize a substantial portion of Volkswagen's U.S. sales, potentially leading to its withdrawal from the U.S. market. Stellantis, another major car manufacturer, views Trump's policies as supportive of U.S. manufacturing. However, the proposed tariffs risk igniting a trade conflict among USMCA member countries, with both Canada and Mexico hinting at retaliatory measures.

The announcement has also caused fluctuations in financial markets, with declines observed in the Canadian dollar, Mexican peso, and the shares of Volkswagen and Stellantis. The potential for a trade war looms, as Canadian officials express confidence in avoiding the tariffs, emphasizing the intricate economic interdependence between the nations.