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Tariffs May Cost Automakers ‘1M Annual Sales’

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June 13, 2018 by   1 Comment

If President President Trump slaps a 25% tariff on imported vehicles, it may cost the U.S. auto industry 1 million annual vehicle sales — and that’s just the low end of the estimated damage.

As reported by the Chicago Tribune, the projection by researcher LMC Automotive assumes automakers would absorb at least half the cost of a tax on imported vehicles, said Jeff Schuster, senior vice president of forecasting. If companies pass the full 25% cost on to consumers, it could snuff out about 2 million sales, or more than 10% of annual U.S. deliveries, he said.

President Trump’s order last month to investigate auto imports for potential trade penalties on national security grounds came as a surprise and quickly drew criticism from automakers, dealers and Republican lawmakers. While some analysts discounted it as a negotiating tactic to pressure Canada, Mexico and the European Union on trade, Trump has since attacked Canadian Prime Minister Justin Trudeau following the G-7 summit in Quebec.

Trump’s statements may merely be “chest thumping,” Schuster said. But after the U.S. imposed tariffs on imports of steel and aluminum from countries including Canada and Mexico, the threat of new levies must be taken seriously. “The escalation is starting to happen,” he said.

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One Response to “Tariffs May Cost Automakers ‘1M Annual Sales’”

  1. George M Sutton on June 13th, 2018 3:25 pm

    I think we are just witnessing posturing for negotiations. Everyone seems to forget the huge trade-deficit we have each year. It seems to be a one-sided situation that needs to even out. Why do so many get upset when all that is happening is shaking up the status quo? Read about Andrew Jackson’s attack on 30-years of entrenched government employees. It’s a hard battle, nobody wants their cushion taken away.

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