Trump's threat of tariffs forces auto suppliers to reconsider their manufacturing schedules.

Reuters, January 9, Las Vegas According to industry officials at CES in Las Vegas, international car suppliers are calculating how much of their production can be shifted to the United States or near it as a defense against tariffs proposed by President-elect Donald Trump.Eight years of U.S. protectionism have already been experienced by the auto sector, starting with actual and threatened tariffs during Trump's first term and continuing with more duties and the U.S. Inflation Reduction Act under President Joe Biden. The majority of the policies were directly targeted against China, especially the Biden administration's plan to prohibit Chinese hardware and software from being used in automobiles on American roads.

Trump, however, has pledged to go much farther, enacting a 60% tax on Chinese goods and a 10% general charge on imports into the US from around the world. He specifically promised in late November that when he takes office on January 20, he will impose a 25% tariff on imports from Canada and Mexico.In addition to making many vehicle parts made in lower-cost markets unfeasible, such high tariffs would be difficult to pass on to customers and, in the case of China, would make it nearly impossible to sell goods in the United States."Anyone can do the math," Paul Thomas, head of North America for Bosch (ROBG.UL), the largest auto parts supplier in the world, told Reuters. "If it's 10%, 20%, 60% (tariffs) ... you have to say, 'OK, how many scenarios make sense for that and which ones do we act on?'" "We've already started on a few of those even before he (Trump) will take office." Thomas provided a hypothetical example of a generic electronic control unit that Bosch might currently produce in Malaysia or a comparable market while stating that "we're looking at doing that in Mexico or Brazil... areas where we have a footprint already," while speaking on the fringes of the CES tech conference.