US President Donald Trump signed an executive order on Monday (1st) slapping an additional 25% tariff on imports from Canada and Mexico and a 10% tariff on Chinese goods on top of existing tariffs, which will take effect on February 4th.

These tariffs are expected to lay an immense impact on the car making industry, according to the Nikkei. Data from the US Department of Commerce shows that imports of cars and auto parts from Mexico to the US accounted for 27% of the total from January to November last year, while related imports from Canada accounted for 12%.

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Last year, cars produced in Canada and Mexico made up for 22% of US auto sales, according to data from S&P Global Mobility under S&P. Nomura Securities analyst Anindya Das estimated that after factoring in assembled cars and parts, the additional tariffs on these three countries will suppress the US auto sector's operating profit (OP) by US$33 billion.

The report also quoted Mizuho Securities Chief Economist Shunsuke Kobayashi as saying that if the affected countries decide to impose retaliatory tariffs, it will have a snowball effect on the global economy and Japan's economy. In Mizuho's projection, the broad tariffs will reduce US real GDP growth by around 0.76 ppts and Japan's real GDP growth by about 0.07 ppts.