The Chevy Blazer is caught up in Trump’s latest trade threat. GM sold 690,865 Mexican-made Chevy and GMC models in the U. S. last year.
When General Motors took the wraps off the new Chevy Blazer in June, the company expected it to be a very profitable vehicle. After all, SUVs are in hot demand, the styling got high marks and the fact that it was being built in Mexico meant the profit margin would be fatter than usual.
Now the Blazer is one of many models potentially caught up in President Donald Trump’s latest trade threat. If Trump makes good on his promise to put a 5% tariff on everything the U. S. imports from Mexico, GM will be stuck with a tough choice on the Blazer.
„What is GM’s strategy going to be for handling these tariffs?“ asked Michelle Krebs, an analyst for Autotrader. „I’m not sure GM knows if it should eat the cost, which would kill profit margins, or pass the five percent along to consumers which would raise prices and hurt sales.“
Neither choice is a good one for GM or any other automaker importing models and parts from Mexico. Since the passage of the North American Free Trade Agreement in the mid-90’s made producing cars in Mexico more financially attractive, the auto industry has increasingly added plants and assembly lines south of the border.
