Tariffs on Mexico Would Cause Severe Disruption in Ohio's Auto Industry

Jun 5, 2019

Ohio’s auto industry could suffer major disruption if President Donald Trump’s tariffs against Mexico take effect.

That's according to Case Western Reserve University economist Susan Helper, who studies the U.S. auto industry.

She said around 20 percent of the parts used in the more than 1.1 million cars made each year in Ohio come from Mexico.

Helper said the tariffs will not only make imported parts more expensive, the disruption will impact productivity in the sector.

“Companies will spend a lot of time scrambling," said Helper, "and that’s time they could be spending innovating something new, making a new product, making a new production system.”

Helper said U.S. automakers have more of their supply chains in Mexico than do their Japanese or German competitors, "so the tariffs will disproportionatly hurt U.S. automakers."

"This could conceivably lead to less auto manufacturing in the U.S." she said.

Helper said, unlike most economists, she's not opposed to tariffs when used in trade disputes or for national security. 

But she said the Trump administration's plan to use tariffs to censure Mexico for the unrelated issue of immigration, "is unprecedented and dangerous."