President Donald Trump's surprise announcement that he will be levying tariffs against Mexico could have a major impact on automakers and consumers.
In a statement Thursday, President Trump declared a 5 percent tariff would be levied on all Mexican goods on June 10 and would grow larger at set intervals capped at 25 percent, QUOTE "until Mexico substantially stops the illegal inflow of aliens coming through its territory."
The issue for U.S. automakers and consumers is that a large number of auto companies use parts from Mexico to produce their vehicles. According to CNN, more than $59 billion in parts were imported from Mexico last year.
Mexico is currently the largest foreign source of automotive parts, contributing nearly 16 percent of parts used in American assembly plants.
Finished vehicles are also a major import from Mexico, with nearly 2.7 million cars and trucks imported from the country last year.
The cost of parts and completed vehicles could potentially increase by as much as $28 billion a year if the import tariff reaches 25%.