In a bold move that has reignited debates on trade policies, former President Donald Trump has threatened to impose a 200% tariff on vehicles imported from Mexico. This escalation comes during his campaign for the 2024 U.S. presidential election, where he faces Democratic contender Kamala Harris in a closely contested race.

Doubling Down on Tariffs

At a rally in Juneau, Wisconsin, Trump addressed a crowd of supporters, doubling his previous promise of a 100% tariff on imported cars and trucks from Mexico. The move is designed to bolster the U.S. auto industry, a sector that has long been a focal point in trade discussions. Trump’s latest proposal marks a dramatic increase in protectionist trade rhetoric that he has often used throughout his political career.

“We’ll put a tariff of 200% on if we have to,” Trump said, emphasizing his stance on limiting automotive imports from Mexico to protect U.S. jobs and manufacturers.

This is not the first time Trump has threatened such a policy. As president in 2016, he floated the idea of imposing heavy tariffs on Mexican autos and parts, though they never reached the proposed 200% figure. Back then, a potential 25% tariff was seen as extreme, and experts are now questioning how the auto industry would handle a duty eight times that amount.

The Impact on the Automotive Market

If imposed, a 200% tariff on Mexican vehicles could have sweeping consequences for the U.S. auto market. Mexico exported around 3 million vehicles to the U.S. in 2023, with nearly half of those coming from the Detroit Big Three—General Motors, Ford, and Stellantis. A massive tariff would likely drive up vehicle prices, affecting not only imports but also domestic car sales.

The Tax Policy Center think tank has weighed in, suggesting that such a tariff could drastically increase the price of both new and used vehicles. “The cost of motor vehicles, domestic as well as imports, would see significant price hikes,” they stated. Auto manufacturers have long warned that high tariffs on imported components from Mexico would force them to pass on the added costs to consumers.

This price increase could also shift consumer behavior, potentially slowing down the already fragile automotive market and encouraging buyers to hold onto their existing vehicles longer. A shift like this could strain the industry, which is still recovering from pandemic-related disruptions and supply chain issues.

Trump’s campaign efforts in states like Wisconsin, Michigan, and Pennsylvania highlight his focus on regions critical to U.S. automotive manufacturing. He secured victories in these key swing states during the 2016 election, and his latest rallies indicate that he sees them as essential for a 2024 win as well.

Wisconsin, in particular, has been a focal point for both Trump and Harris, with each candidate investing significant resources to court voters. Recent polls suggest that Harris holds a slight edge in the state, which voted for Joe Biden in the 2020 election after backing Trump in 2016.

While Trump’s tariffs may appeal to certain segments of voters, particularly in manufacturing-heavy states, some experts are cautioning that his proposals could backfire by driving up costs for U.S. consumers and limiting market competition.

The Bigger Picture

Beyond just the auto industry, Trump’s protectionist stance on trade could impact the broader U.S.-Mexico trade relationship. Mexico is one of the United States’ largest trading partners, and tariffs of this magnitude could strain diplomatic and economic ties between the two nations.

During his speech, Trump also criticized the Biden administration’s handling of the recent Hurricane Helene disaster. Though his remarks briefly diverged from the focus on the auto industry, they reflect his broader strategy of targeting the current administration’s performance on multiple fronts.

As the 2024 election approaches, Trump’s tariff threats serve as a reminder of the protectionist trade policies that defined much of his first term in office. Whether or not these proposals gain traction remains to be seen, but they are certain to spark debate among automakers, consumers, and politicians alike.

For now, automakers, consumers, and industry experts will be watching closely to see how these developments unfold, knowing that the potential for higher vehicle prices could have a lasting impact on the auto industry and the broader economy.