President Donald Trump’s announcement of a 25 percent tariff on imported foreign automobiles and parts has economic experts warning that higher prices are on the way.
Announcing the news on Wednesday, March 26, Trump said the move — set to go into effect on April 3 — would increase domestic manufacturing. He also claimed that car prices would fall. “You’re going to see prices going down, but it’s going to go down specifically because they’re going to buy what we’re doing,” he said from the Oval Office, according to CNN.
However, experts don’t agree with that assertion. They believe the opposite is true.
Research firm Cox Automotive suggests Trump’s levies would add $6,000 to the price of an automobile manufactured in Mexico or Canada, two of the top car exporters to the U.S, according to The New York Times. The models affected include the Toyota Tacoma pickup and versions of the Chevrolet Equinox and Ram pickups.
Speaking with CNN, Ivan Drury, director of insights at Edmunds.com, a car shopping guide, said that the move “is going to be expensive.”
“It’s too soon to tell how much,” he added. “But it’ll be a couple of thousands of dollars, if not more.”
Stock image. Getty Images/iStockphoto
The new tariff has drawn mixed reviews globally, including from world leaders of countries that export their vehicles to the U.S.
“Japan is a country that is making the largest amount of investment to the United States, so we wonder if it makes sense for (Washington) to apply uniform tariffs to all countries,” said Prime Minister of Japan Shigeru Ishiba, per Reuters. “That is a point we’ve been making and will continue to do so.”
“We need to consider what’s best for Japan’s national interest,” Ishiba added. “We’re putting all options on the table in considering the most effective response.”
Canadian Prime Minister Mark Carney went on to call the U.S. action on imported automobiles a “direct attack” on his country’s workers.
“We have to look out for ourselves and we have to look for each other and work together, for each other,” Carney said, according to UPI.
Meanwhile, one Canadian auto leader expressed themselves more bluntly.
“This is nuts,” Flavio Volpe, president of the Automotive Parts Manufacturing Association, told the Canadian Press, adding of Trump: “It seems he’s bent on doing the things that he’s been warned will shut down the American auto sector.”
