Donald Trump?s war on cars is pushing the US closer to a recession

New taxes on Mexican goods would be the latest blow to automakers, and would come at a precarious timeWhen President Donald Trump announced new tariffs on Mexican goods this week, he delivered the latest blow in a war he’s waged on automakers since before he was elected. “In order not to pay Tariffs, if they start rising, companies will leave Mexico, which has taken 30% of our Auto Industry, and come back home to the USA,” he wrote on Twitter Friday. The automaker announced in late 2014 that it planned to invest $5 billion in Mexico over the next six years, even though it already had four complexes with 14 manufacturing facilities in the country. His tariffs on steel and aluminum cost GM and Ford about $1 billion each, and Fiat Chrysler around $500 million.This week’s move, then, is just another salvo in a now years-long war Trump has waged against automakers and suppliers who don’t directly serve up jobs in the US economy. “And that’s what turns into a recession, because when you send 10,000 people home for a month, they all have to tighten their belts.”If Trump’s tariffs on Mexican goods never materialize, or if the two countries find some kind of agreement on immigration, that would help avoid putting extra pressure on the economy, both Krebs and Betts say — even if it likely won’t stop him from warring with automakers over where they build their cars.But even in that situation, Trump’s latest threat might wind up hurting the economy another way. By announcing new tariffs on Mexico while all this was happening, Krebs says Trump is jeopardizing the ongoing trade talks with the rest of the world.“We’re negotiating all kinds of other trade agreements with Japan with Europe and China that affect the auto industry,” she says.