Yahoo Finance Commercial Border Delays Hit Auto Industry
Tuesday, April 9, 2019
The U.S. auto industry braces for impact this morning, as border delays with Mexican auto parts deliveries are currently experiencing “serious delays” into our country. The integrated North American auto industry — where parts often cross the border several times before finally being installed in an automobile — is now threatened by policy shifts for the business of automakers and suppliers on both sides of the border.
This industry generates $1.7 billion in trade per day, but gridlock has dwindled the number of shipments reaching their destinations by roughly half. Popular pickup truck brands like Chevy Silverado GM and Fiat Chrysler’s FCAU Ram trucks are among those to be most deeply affected.
The Trump administration has transferred 750 border agents away from commercial processing to deal with growing immigration realities at the southern border, where a new influx of families prepare to cross into the U.S. from various troubled countries in Central and South America. While immigration from our neighbors to the south had subsided in recent years, these numbers are expected to spike up in 2019.
Last year, 2.6 million autos were exported from Mexico to the U.S. — the best year ever for this integrated industry. In fact, more than 15% of U.S.-sold cars, pickups and crossovers were sold in the U.S. in 2018. Now, gridlock threatens the businesses of not only the big auto companies, but parts suppliers and car dealerships, as well.
The White House has also set its sights on imposing new tariffs on European goods imported to the U.S., such as wine, cheese and things like passenger helicopters. This is in response to what the administration feels are “unfair” subsidies to airplane manufacturer Airbus, the main competitor of U.S.-based Boeing BA.
Approximately $11 billion in goods from the European Union (EU) is reportedly expected to be affected. The U.S. Trade Rep awaits a ruling by the World Trade Organization (WTO) this summer. These tariffs appear to follow similar trade policy the Trump administration has implemented with Chinese trade, which has led to tensions that have affected economies both in China and the U.S. since last autumn.
Mark Vickery
Senior Editor
Questions or comments about this article and/or its author? Click here>>
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Boeing Company (BA) : Free Stock Analysis Report
General Motors Company (GM) : Free Stock Analysis Report
Fiat Chrysler Automobiles N.V. (FCAU) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
