President Trump’s Auto Tariffs: A Closer Look at How Major Automakers Are Responding
As of July 1, 2018, President Trump’s 25% auto tariffs are now in effect. This decision, which was made under Section 232 of the Trade Expansion Act of 1962, has sparked controversy and raised concerns about potential repercussions for both the automotive industry and consumers. Yahoo Finance Autos Reporter Pras Subramanian takes a closer look at how some of the major automakers are responding to this new policy.
Ford Motor Company
Ford, one of the largest automakers in the world, has stated that it will not pass on the additional costs of the tariffs to its customers. Instead, the company plans to absorb the costs itself. However, Ford has warned that this could lead to higher prices for other vehicles in its lineup that are not subject to the tariffs. In a statement, the company said, “We are committed to being transparent with our customers, and we will not pass on these costs to them. We are, however, concerned about the potential impact of these tariffs on our business and the industry as a whole.”
General Motors
General Motors, another major player in the automotive industry, has also announced that it will not pass on the tariffs to its customers. Instead, the company plans to absorb the costs and take a hit to its profits. In a statement, the company said, “We are continuing to review the situation and assess the impact on our business. Our focus remains on delivering value for our customers, employees, and shareholders.”
Tesla, Inc.
Tesla, the electric car company, has been vocal about its opposition to the tariffs. In a statement, the company said, “We believe the proposed tariffs are a bad deal for workers, consumers, and the American auto industry. We urge the administration to reconsider.” Tesla, which imports the majority of its vehicles from China, could be hit particularly hard by the tariffs.
Impact on Consumers
The tariffs could lead to higher prices for consumers, as automakers absorb the costs or pass them on in the form of higher sticker prices. According to a report by the American Automotive Policy Council, the tariffs could lead to an average price increase of $4,400 per vehicle. However, it’s important to note that not all vehicles will be affected equally. Some vehicles, particularly those that are heavily imported, could see much higher price increases.
Impact on the World
The tariffs could have far-reaching consequences for the global auto industry. Some countries, particularly China, have threatened to retaliate with their own tariffs on American-made vehicles. This could lead to a trade war between the two countries and could have negative impacts on both economies. Additionally, the tariffs could make American-made vehicles less competitive in the global market, making it more difficult for American automakers to sell their vehicles abroad.
Conclusion
President Trump’s auto tariffs have sparked controversy and raised concerns about potential repercussions for both the automotive industry and consumers. While some automakers, such as Ford and General Motors, have announced that they will not pass on the additional costs to their customers, others, such as Tesla, have voiced their opposition to the tariffs. The tariffs could lead to higher prices for consumers, and could have far-reaching consequences for the global auto industry. Only time will tell how this situation unfolds, but one thing is clear: the auto industry is in for a bumpy ride.
- Ford and General Motors plan to absorb the costs of the tariffs
- Tesla has voiced its opposition to the tariffs
- Higher prices for consumers
- Potential for a trade war between the US and China
- Negative impacts on the global auto industry
