When Tariffs Hit Home: The U.S. Auto Industry’s North American Supply Chain

U.S. automakers build cars through production networks that span the United States, Mexico and Canada, with parts often crossing borders several times before final assembly. In a new commentary for The National Interest, Jerry Haar, a business professor at Florida International University and a WISC Global Fellow, examines how tariffs on Mexican vehicles and components affect that system as the United States, Mexico and Canada work through the USMCA review.

Haar argues that tariffs on Mexican inputs fall largely on American manufacturers: they raise costs for U.S.-assembled vehicles, compress margins or push up prices, and can cost U.S. parts suppliers orders when Mexican assembly slows. Rebuilding capacity domestically, he notes, takes tooling, supplier development and years of adjustment.

The piece contributes to a broader debate central to WISC’s Productive Capacity pillar: how the United States can strengthen its industrial base and economic security while drawing on trusted regional partners.

Read the full paper at The National Interest.

External publications are featured to highlight the scholarship and perspectives of DRI–WISC affiliated faculty and researchers. The views expressed are solely those of their respective authors.