2019 Honda FitHandout / Honda Rhetoric south of the border about tariffs on Mexican imports continues apace. Current plans call for a five-per-cent tariff to be slapped on all goods entering America from Mexico, including cars and trucks. Furthermore, top brass say they want to increase the levy by a further five per cent each month, topping out at 25 per cent in October. What does this have to do with us in Canada? Plenty, according to the Japan Automobile Manufacturers Association. They represent Honda, Toyota, Mazda, Nissan, Subaru and Mitsu, plus the luxury brands of those automakers. And they warn that small cars like the Fit and Yaris could be affected by the tariffs. According to a spokesperson for the association, in a conversation with Automotive News Canada, tariffs can impact Mexican-made cars heading to Canada a couple of different ways. In one case, vehicles could be shipped to Japanese subsidiaries in the U.S. and then re-sold to Japanese automakers in Canada. Otherwise, they’d be shipped through America into our country directly. Either way they get here, one thing’s easy to understand: the tariff cost will almost surely be passed on to consumers. While it’s likely the tariff will be applied to some other calculated number rather than the final MSRP, it could still make for an unpleasant price hike. Adding 25 per cent to the sticker of a base Honda Fit, for example, would add about $4,000 to its $15,590 asking price. A good many light trucks are also assembled in Mexico, vehicles which bear a much higher cost than the Fit. Tacking a 25 per cent surcharge onto a $50,000 pickup jacks the sticker to $62,500. Again, we know these tariffs, should they come into effect, will likely not go right on top of the MSRP. Still, these examples make the stark point that many vehicles could become a heckuva lot more expensive – and that car buying activity will probably stall – until cooler heads
Origin: Mexican tariffs will probably impact car costs in Canada