Alabama’s auto industry, which supported nearly 90,000 jobs in 2023, could be significantly impacted by President Donald Trump’s planned tariffs on Canada, China and Mexico.
Citing alleged national security and illegal drug trafficking, the Trump administration announced a plan to impose a 10% tariff on Chinese imports. The administration delayed a 25% tariff on Mexico and Canada by a month Monday after Mexico agreed to send troops to the border and Canada agreed to negotiations on border policy.
These three countries are in the top five countries of origin for imports coming to Alabama, totaling $15.9 billion in 2023, or about 60% of all imports. The auto industry in the state, built around the Mercedes-Benz plant in Vance, just outside Tuscaloosa; Hyundai in Montgomery and Honda in Lincoln, is a large part of that.
“The North American auto industry is highly integrated and the imposition of tariffs will be detrimental to American jobs, investment, and consumers,” said Jennifer Safavian, president and CEO of Autos Drive America, which represents both American Honda Motor Company and Mercedes Benz International U.S.
In 2023, Alabama imported goods worth $37.1 billion, ranking as the 21st largest importer among the 53 U.S. importers. Nearly all the state’s top imports, including crude petroleum oils ($3.04 billion), spark-ignition reciprocating engines over 1,000 cc ($1.43 billion), various motor vehicle body parts ($1.25 billion), motor vehicle transmissions ($1.01 billion), and ignition and wiring sets for vehicles ($995 million) go toward building new cars.
Trump postpones big tariffs against Canada and Mexico for one month
Safavian said that proposed tariffs undermine the United States–Mexico–Canada Agreement, a free trade agreement between the three countries, which was revised and ratified by the three countries under the first Trump administration.
John Bozzella, president and CEO of the Alliance for Automotive Innovation, which also represents Mercedes Benz, pointed to the economic significance of trade.
“Seamless automotive trade in North America accounts for $300 billion in economic value,” Bozzella said in a statement. “It not only keeps us globally competitive, it supports auto industry jobs, vehicle choice, and vehicle affordability in America.”
Hyundai, which has heavily invested in U.S. manufacturing, said in a statement Monday it is evaluating the potential impact on its supply chain.
“For nearly four decades, Hyundai has been a driver of American growth and innovation, contributing jobs, economic activity, and investments that have helped Americans prosper,” according to a company statement. “We constantly assess how new policy developments affect our business and are in the process of understanding the specifics of the tariffs and their impact.”
Mercedes-Benz, another international automaker, pointed to its commitment to free trade principles and warned against rising protectionism, or an economic policy of restricting imports from other countries, such as tariffs and import quotas.
“Free trade and fair competition ensure prosperity, growth, and innovation,” Andrea Berg, a spokesperson for Mercedes-Benz North America Corp said in an email. “If a general trend towards protectionism gains a foothold, this has negative economic consequences for all stakeholders involved.”
The Alabama Automotive Manufacturers Association declined to comment on the tariffs, saying they would discuss the issue at their upcoming conference in March.
Alabama Reflector is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Alabama Reflector maintains editorial independence. Contact Editor Brian Lyman for questions: info@alabamareflector.com.
