A general import duty of ten percent on all imports to the USA is under discussion. Trump wants to impose a 25 percent tariff on goods from Canada or Mexico, and as much as 60 percent on imports from China. "Everyone can do the math," Paul Thomas, head of North America for the Stuttgart-based automotive supplier Bosch, told Reuters on the sidelines of the CES electronics show in Las Vegas. "If it's going to be 10 percent, 20 percent or 60 percent (tariffs), you have to ask yourself which scenarios make sense and how you will react." Bosch is already playing through such scenarios, but is waiting to see what happens after Trump takes office on January 20 before making any decisions.
The automotive industry has had to deal with rising tariffs since Trump's first term in office (2017-2021). Under the following administration of Democrat Joe Biden, the Inflation Reduction Act funding program attracted investments to the United States. But supply chain problems during the coronavirus pandemic also led to increased localization of production in the respective sales markets.
Bosch competitor Continental therefore already sees itself as well positioned to be less affected by higher tariffs. CEO Nikolai Setzer explained that Conti is nevertheless in discussions with its suppliers in North America, where parts will be sourced in the future to avoid tariffs. Suppliers need to keep an eye on how their customers, the carmakers, react to the new rules of the game. At the CES, a manager from Japanese carmaker Honda said that its production in Mexico could possibly be relocated to Japan or elsewhere.
Trump's hard line against China is leading to a situation where sources for preliminary products are being sought in other countries or in the US itself. Tesla's battery supplier Panasonic Energy, for example, has therefore switched to raw material suppliers in the US and Canada. The plan to completely dispense with materials from China in batteries produced in the US is now being implemented at an accelerated pace, said Allan Swan, head of North America.
(Report by Abhirup Roy; written by Ilona Wissenbach, edited by Ralf Banser. For further inquiries, please contact the editorial team at frankfurt.newsroom@thomsonreuters.com)