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For Mercosur, High Auto Tariffs Are All Part of the Game

Sep 18, 2018 | 09:00 GMT
Workers assemble cars at the Nissan plant in Resende, Brazil, during February 2015. Most major automakers have factories in Brazil and Argentina.

Workers assemble cars at the Nissan plant in Resende, Brazil, during February 2015. Most major automakers have factories in Brazil and Argentina. The assembly line of the March and Versa models at Nissan's Industrial Complex in Resende, 160 km west of Rio de Janeiro, Brazil, on Februrary 3, 2015. The Nissan plant in Brazil will be able to produce 200,000 cars and utility vehicles per year. The company aims to achieve 5 percent of the market share by 2016 in Brazil, the fourth largest automotive market in the world.

(YASUYOSHI CHIBA/AFP/Getty Images)

U.S. auto tariffs will have little direct effect on the South American trade bloc Mercosur. The economic alliance, also known as the Common Market of the South, is insulated from the prospective fees because most of its vehicle production stays in the bloc. But the alliance, known for its own high tariffs on vehicles and auto parts, was already taking steps to open its automotive industry before the United States started threatening tariffs. Over the past two years it has been working on free trade agreements with Mexico, Japan, South Korea and the European Union, whose automakers may look to the bloc to make up for lost U.S. sales if the tariffs enter effect....

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