President Donald Trump Announces 25 Percent Tariffs on Imported Cars UPDATED
President Donald Trump announced 25 percent tariffs on imported cars on Wednesday afternoon.
These tariffs would apply to "finished" cars being shipped in from overseas -- including vehicles built overseas by American brands. They would also apply to trucks.
According to The New York Times, nearly half of vehicles sold in the country are imported.
As we've noted before, vehicles sometimes cross the borders between the U.S. and Canada or Mexico multiple times during production, and even vehicles built in America use components shipped in from Canada, Mexico, and sometimes, overseas.
It's unclear if these tariffs will apply to components shipped in from overseas. Trump, of course, has enacted 25 percent tariffs on imported steel and aluminum.
Updated: The New York Times confirms that these tariffs will apply to auto parts.
From the Times:
“This is very exciting,” Mr. Trump said during remarks from the Oval Office. He said he would sign an executive order “that’s going to lead to tremendous growth in the automotive industry.”
Trump's intent is to bring manufacturing back to the U.S., but as noted, it takes time for automakers to shift production from overseas to American plants or to build new plants in the United States.
Indeed, while the president believes this will lead to growth, economists believe that the moves could scramble carmaker supply chains, cause automakers to pull back on investments, and raise car prices (both new and used), significantly.
There may also be push back from European countries like Germany and Italy, as well as Asian countries such as South Korea and Japan, given that many cars sold in the U.S. are built in those countries.
Wall Street is not happy, with the S&P 500 dropping about 1 percent and most automotive company stocks sliding 2 percent.
[Image: Andrew Harnik/Shutterstock.com]
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Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.
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@Billccm , I respect your opinion . Canada had a debate in the 1980’s about whether we should enter into a further integration ( NAFTA ) during a then election . I thought it would be better for Canada and US to not do a NAFTA agreement at the time . It would have forced both countries to diversify and/or become self sufficient, which they can with some difficulty . But here we are -40 years later down the integration path , so untangling won’t be without pain . Also the trade deficit noted by US admin , it is $60 billion a year, ( not $200 billion that is talked about ) This is including energy , which is a big chunk of it .
Perhaps under attack by their own greed??...a cancer growing from within...one of entitlement and ego...I am also a firm believer in that their is no economy unless there's a firm policy of ecology... without ecology there is indifference.