Trump trying to halt the rhythm of booming Mexico’s auto industry

South American heavyweight Mexico faces fears of a sudden slump in its thriving auto industry as numerous auto makers in recent days changed their plans for new investments or said they would consider doing so in response to President-elect Donald Trump’s threats of demanding tariffs.

Meanwhile On Monday, the CEO of Fiat Chrysler Automobiles claimed, his company could completely pull out of Mexico if the future Trump administration follows through on a pledge to impose tariffs on cars exported to the U.S. from Mexico.

Reports said that in last six years alone, Mexico managed to snatch 9 of 11 new automotive factory’s deals in North America, creating tens of thousands of new jobs and converting Mexico into the world’s force in car exports.



However after trumps takeover at least one of those new plants won’t be built now, as Ford Motor Co. last week said it was scrapping plans for a $1.6-billion factory in this central Mexican city 250 miles north of the capital.

So following Ford’s cancellation of its San Luis Potosí plant might have scared many people in a region that always has a constant drumbeat of factory openings and help wanted ads. Now around 2,800 positions at the Ford plant and thousands more related jobs won’t be coming.

At the moment Car-manufacturing is considered as Mexico’s second biggest sector, behind food processing. Ten international car-makers operating here and their 1,300 suppliers, as well as a dozen makers of heavy trucks and buses, employ 730,000 people directly, according to industry officials.

Most significantly, this industry also accounts for much of the U.S.’s $60 billion trade shortfall with Mexico, according to the International Organization of Motor Vehicle Manufacturers. U.S. customers buy more than three-quarters of Mexico’s car exports. That is one of the major reason why Mr. Trump has emphasized most of his attention on the car industry.

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