Auto tariffs "punish" Americans - US manufacturers' costs will increase by $108 billion
A new analysis from the Center for Automotive Research has found that President Donald Trump's 25% tariffs on vehicles, imposed in early April, will increase costs by about $108 billion for U.S. automakers by 2025.
The study found that Detroit automakers Ford Motor, General Motors and Stellantis will see higher costs of $42 billion. The study found that the Detroit Trio could see tariffs of nearly $5,000 on parts they import on average for every car they make in the U.S., and about $8,600 on average for every car they import.
Trump’s 25% tariffs on auto imports took effect on April 3, sending shockwaves through the industry as supplies come in from all over the world. Cars made in Mexico and Canada face the tax, but automakers that comply with the terms of the U.S.-Mexico-Canada Agreement can deduct the value of American components. The tariffs have prompted automakers to make changes, with GM increasing truck production at a plant in Indiana and Stellantis temporarily closing production at a plant in Mexico and one in Canada. The moves affected five U.S. facilities that are affiliated with them.
The study estimates that Detroit Three manufacturers will see an average cost of imported parts per vehicle of $4,911, higher than the overall industry average of $4,239 per vehicle.
For imported cars, the study found that the average toll cost per vehicle is $8,722 for the industry as a whole and $8,641 for the Detroit Three.
The report "shows the significant cost that a 25 percent tariff would have on the auto industry. U.S. automakers Ford, GM and Stellantis intend to continue ongoing dialogue with the administration to increase U.S. auto production."
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