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Get ready to pay a lot more for those replacement parts for your car.

President Trump’s threat to impose higher tariffs on imports from Mexico is walloping the auto parts sector, which sources many products from America’s neighbor to the south.

Mexico is the world’s fifth-largest auto parts producer, and the U.S. International Trade Administration says Mexico exports some 90% of its auto parts to the U.S. In fact, Deutsche Bank calls it Mexico’s number one export to the U.S.

That explains why parts suppliers like Delphi (DLPH), Veoneer (VNE), Lear (LEA) and BorgWarner (BWA) saw steep sell-offs in early trading Friday. These new tariffs could significantly increase the amount parts companies have to charge U.S. retailers, which in turn is likely to trickle down to consumers.
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