Trump tariffs may cost US auto industry 1 million car sales a year
If companies pass the full 25 per cent cost on to consumers, it could potentially snuff out about 2 million sales, or more than 10 per cent of annual US deliveries
If US President Donald Trump imposes a 25 per cent tariff on imported vehicles, it may cost the US auto industry 1 million annual vehicle sales – and that is just the low end of the estimated damage.
The projection by researcher LMC Automotive assumes carmakers would absorb at least half the cost of a tax on imported vehicles, said Jeff Schuster, senior vice-president of forecasting.
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If companies pass the full 25 per cent cost on to consumers, it could snuff out about 2 million sales, or more than 10 per cent of annual US deliveries, he said.
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 carmakers, auto 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.