DETROIT—Experts warn that widespread tariffs proposed by the Trump Administration could have catastrophic effects on the U.S. auto industry, especially when it comes to key components such as wiring harnesses. Mexico is the world’s fourth-largest exporter of auto parts, specializing in labor-intense products such as cable and wire assemblies.

According to Reuters, if 25 percent tariffs were imposed on imports from Canada and Mexico, it would cause “dramatic and immediate financial fallout for U.S. automaker,” with “the Detroit Three among the most exposed.”

Mexico is an important base for wire harness suppliers such as Dräxlmaier, Lear, Leoni, Sumitomo and Yazaki, because of cheap labor and close proximity to the United States. For instance, Dräxlmaier operates six sites in the country. High tariffs could force suppliers to shift production to Vietnam and other Southeast Asian countries.