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Photo: Win McNamee/Getty Images

Already having laid off the highest number of employees in nearly a decade and attempting to recover from a year in which declining global car sales likely reduced world GDP by 0.2%, the auto industry is facing a direct hit from President Trump's threatened tariffs on all goods from Mexico.

Why it matters: Mexico recently became the No. 1 trading partner with the U.S., and a significant percentage of that trade is completed by auto companies. Much of the "trade" is American auto companies exchanging parts, goods and services within entities they own, Deutsche Bank Securities chief economist Torsten Slok pointed out in a note to clients Thursday night.

  • "Trade with Mexico is basically all about the supply chain, which essentially is all about cars."

Driving the news: Trump said the U.S. would add 5% tariffs on all Mexican imports "until such time as illegal migrants coming through Mexico, and into our Country, STOP," in a tweet Thursday night.

  • The White House followed up saying that if the "crisis" at the border isn't resolved, tariffs on Mexican goods will rise by 5 percentage points each month, as high as 25% on Oct. 1.

"The auto industry was already facing trouble," as ratings agency Fitch's chief economist Brian Coulton and analyst Pawel Borowski wrote in a report released Tuesday.

  • "The risk of increased tariffs on global auto trade remains real and would be a significant drag on global GDP if it were to materialize."
  • "The global nature of auto production makes the sector particularly vulnerable to an increase in tariffs."

The big picture: In addition to hurting consumers and company bottom lines, the tariffs are likely to impact jobs.

  • The auto industry is in the midst of a "significant shift," outplacement firm Challenger, Gray & Christmas reported earlier this month, as automakers face changing consumer demands and the implementation of automation.
  • The industry announced 19,802 job cuts through April. That is 207% higher than announced through the same period last year.
  • The total announced cuts for the first four months of this year is the highest since 2009, when 101,036 cuts were announced in the auto sector through April.

American companies have fared particularly poorly, exemplified by Ford’s May 20 announcement that it would cut 10% of its salaried workforce. Six months earlier, General Motors announced the closure of five plants and 14,000 job cuts. Tesla announced over 3,000 job cuts in January.

Go deeper: The world can't afford a trade war right now

Go deeper

Acting Capitol Police chief: Phone logs show Jan. 6 National Guard approval was delayed

Pittman at a congressional tribute for fallen officer Brian Sicknick. Photo: Erin Schaff-Pool/Getty Images

Acting U.S. Capitol Police Chief Yogananda Pittman testified on Thursday that cell phone records show former USCP Chief Steven Sund requested National Guard support from the House sergeant at arms as early as 12:58 p.m. on Jan. 6, but did not receive approval until over an hour later.

Why it matters: Sund and former House Sergeant at Arms Paul Irving clashed at a Senate hearing on Tuesday over a dispute in the timeline for when Capitol Police requested the National Guard during the Capitol insurrection.

Manhattan prosecutors reportedly obtain millions of pages of Trump's tax records

Photo: Al Drago/Bloomberg via Getty Images

The Manhattan district attorney is now in possession of millions of pages of former President Trump's tax and financial records, CNN first reported, following a Supreme Court ruling that allowed prosecutors to enforce a subpoena after a lengthy legal battle.

Why it matters: Trump fought for years to keep his tax returns out of the public eye and away from prosecutors in New York, who are examining his business in a criminal investigation that was first sparked by hush-money payments made by Trump's former fixer Michael Cohen during the 2016 election.

Dion Rabouin, author of Markets
3 hours ago - Economy & Business

The digital dollar is now high priority for the Fed

Illustration: Aïda Amer/Axios

The U.S. is starting to get serious about a central-bank-backed digital currency, with recent comments from top officials laying out the strongest support yet.

Driving the news: On Tuesday Fed chair Jerome Powell told Congress that developing a digital dollar is a "high priority project for us," but added that there are "significant technical and policy questions."