Major automotive supplier Continental has said it will be passing on the additional costs of new tariffs imposed by the US.
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The company’s CFO, Olaf Schick, told Bloomberg that it cannot absorb additional duties in the US. ““For us it’s clear: We cannot bear additional duties, and we are informing our customers about that,” he told the news agency.
Continental has also set up a tariffs task force and is talking to customers in North America who are receiving its Mexico sourced products, the report said.
Bloomberg noted that Continental operates more than twenty plants in Mexico and generates around a fifth of its group sales in the US.
This week the US President has announced new 25% tariffs on imports from Canada and Mexico as well as a 20% tariff on imports from China.
A new round of ‘reciprocal’ import tariffs is planned by the Trump administration for countries and trade blocs around the world from early April, with the EU likely to be impacted with new tariffs on its vehicle shipments to the US.
However, some reports have suggested that the US will quickly negotiate new trading arrangements and deals with impacted countries or blocs, even as the new trade arrangements come into force.
Automakers in the US face potential disruption from the impact of tariffs on North America’s highly integrated industry and there are fears that the higher costs in the supply chain and for finished vehicles could lead to much higher prices for US consumers. There is also much uncertainty over the duration and detail of the new tariffs and how they will be applied to automotive components that cross NA borders.
