The president of United States, Donald Trump, announced that from April 2 a 25% tariff on imported vehicles will be imposed. Although Peru not exported cars, it does participate in the auto parts industry and is a strong vehicle importers, what could generate both risks and opportunities.
With this new policy, The tariff rate would now rise from 2.5% to 27.5%, mainly affecting Mexico, Japan, South KoreaCanada, Germany and the United Kingdom. Meanwhile, Chinese electric cars will be taxed 100% to 125% in the United States.
According to the society of Peru’s foreign trade (Comexperú), the main sources of importation of vehicles for the United States are Mexico (33%), Japan (16%) and South Korea (14%), followed by Canada (13%). In the event that tariffs are applied without exceptions, these economies could see their exports affected and, therefore, generate distortions in the global supply chain.
“If the measure is implemented as it has been announced, without exception, there they would come to compete for prices. But, if there are exceptions for some countries, there could be a trade deviation from certain car matric houses. It would be necessary to think about the medium or long term effects to see if companies rearrange or begin to invest in other countries that do not have that application of tariffs ”said Rafael Zacnich, Manager of Economic Studies of COMEX Peru, to Management.
Is Peru part of the supply chain?
Peru has a limited presence in the auto parts market, especially in shipments to the United Statesbut this would further complicate the growth possibilities of the sector.
According to data from the International Trade Commission, Usitc, Only last year about US $ 28,850 million in auto parts from Peru to the United States were exported to the United Statesmainly windshield, glass and car windows.
In fact, said the specialist of Comexperú, only in safety glass -which takes into account input exports not only for carsS, but also for aircraft and others-almost US $ 65 million is sent to the United States.
“It is a small participation if we consider that the United States Demands more than US $ 90,000 million in auto parts and that Mexico supplies it with more than 40%, but perhaps it can generate possible affectation to Peruvian companies that place their products there ”, Zacnich pointed out.
One of the Peruvian companies dedicated to this item, AGP Group, recently announced the closure of its branch in Mexico due to the cancellation of a contract with Tesla and the uncertainty generated by tariffs.
While the application of these tariffs worries, Zacnich considered that if they only focus on the countries of greater shipments, there could be a window of possibilities to generate new investments in the sector, which also manufactures bearing trains, bumper, and silencers and escape tubes.
“Let’s put ourselves on the stage that this tariff applies to countries A, B, YC, the rest of the countries They could see an opportunity or investors could see an opportunity in other countries that this tariff is not applied but it will already be a purely commercial decision, ” projection.
Apart from the security glass, other inputs for the automotive industry are manufactured in the country, As seals and cables, although on a smaller scale, said Karsten Kunckel, president of the Automotive Association of Peru, AAP.
He also indicated, Peru is also an important exporter of the raw materials that are used For electromechanical vehicles, such as copper, gold, silver, lead and zinc.
“We must not only export inputs for vehicles, but we must expand it. There must be more manufacturing from the Automotive sector so that plants are also interested or brands are interested in installing a assembly plant here in Peru. For that we first need to have an input industry for the automotive sector, ”said Kunckel.
One of the main concerns is the effect that tariffs will have on the supply and demand of vehicles globally. This, they indicate, would definitely raise vehicle prices in the United States, but could prices alter in Peru?
For Zacnich of Comexperú, If the measure is implemented as announced, a competition in prices could be seenbut it is still uncertain for the Peruvian market.
“If the comparable demand (from the United States in Peru) existed, we could probably have topped vehicles. But the truth is that the Peruvian automotive market, although it has grown over last year, there is no security that it will be able to absorb those vehicles that would not be bought in the United States, ”he explained.
Meanwhile, Kunckel of the Automotive Association said the measure could lead to automotive brands prioritizing emerging markets such as Peruvian.
“Brands are going to concentrate more in countries that do not have tariffs, so they will put more interest to emerging countries where there is still a potential growth market and probably also means greater competition and greater presence in the market, ”he said.
Even Kunckel highlighted, the offer of Chinese electric cars could be redirected to emerging markets such as Peru. This, he considered, should be used to foster the scrap of the old fleet and replace it with new electrified vehicles such as hybrids and totally electric.
