WACO, Texas (KXXV) — There are concerns about a supply chain disruption in the auto parts industry following tariffs that went into effect this week on Mexico, Canada, and China.
Those concerns can be felt here in our own Central Texas neighborhoods.
Perales Brothers Automotive has served our Central Texas neighbors for 17 years.
Owner Chris Perales said that around 90% of their parts are imported from around the globe, including China, Mexico, and Canada.
"What worries me is the supply chain," he said and added "not only will the price of the parts be going up, but so will the availability of the parts. That’s where we may run into a problem here very shortly."
Chris added that it could impact customers and take much time to fix a car.
“If that part is on back order or unavailable, I mean a customer may have to sit without their car for weeks or maybe even a month or longer before we can get that part in," he said.
25News' Bobby Poitevint contacted some local economists to learn more about this and if it is a valid concern.
Dr. Ray Perryman is the founder and CEO of The Perryman Group in Waco.
He said, “Well, it’s gonna be very disruptive on the supply chain. If you take all the tariffs on all three countries combined, we’re estimating a loss of over 300 billion dollars year end gross product if you sustain them, and I don’t honestly think he’ll substant them. I don’t think they’ll last very long.”
President Donald Trump told the joint session of congress on Tuesday that the tariffs are expected to bring trillions of dollars to our economy and strengthen American businesses, including mom-and-pop businesses. He called any negative impacts on Americans a “little disturbance."
On Wednesday, President Trump announced a one-month tariff exemption for cars against Canada and Mexico following a meeting with major U.S. auto makers.
Dr. Tom Fullerton is an economics professor with The University of Texas El Paso.
He said, "the reason that we have automobile manufacturing in the United States is that it’s so highly integrated with overseas component manufacturers."
He added, "I know the White House wants to sure-up the American economy but tariffs are not the right way to do it.”
For Chris, there’s some optimism even with an uncertain future.
“Hopefully, it’s a temporary thing, and hopefully, it’ll work out for the good towards the end," he said.
Experts believe it could be two to three months before we felt any of these potential impacts and delays, as there is still a large supply of imported products on the shelves.
