Automakers have been edge for a few months with talk of a trade war and possibly putting up to a 25 percent tariff on imported new vehicles. They only would be pushed further to the edge as President Donald Trump tweeted last week a 20 percent import tariff on all cars assembled in the European Union. Now, automakers are rebuking the President over this.
Reuters reports today that two trade groups, representing nearly every major global automotive brands have issued comments saying the president shouldn't go forward with tariff. The two groups in question are the Association of Global Automakers (represents Honda, Hyundai, Kia, Nissan, Subaru, Toyota, and others) and Alliance of Automobile Manufacturers (represents General Motors, Ford, FCA, BMW, and others).
The primary concerned brought up by both groups? Jobs.
“Rather than creating jobs, these tariffs would result in the loss of hundreds of thousands of American jobs producing and selling cars, SUVs, trucks and auto parts,” said the Association of Global Automakers.
Both groups cite a study done by the Peterson Institute for International Economics which estimates job losses between 195,000 to 624,000 depending if other countries retaliate with their own tariffs.
Next up is the increased cost on a new vehicle. The Alliance of Automobile Manufacturers says a consumer could expect to pay an average of $5,800 more on a new car. This number is based on analysis of 2017 sales data and factoring in a 25 percent tariff. New cars are already expensive - Kelly Blue Book said the average transaction price for May stood at $35,635.
The final concern brought up deals with a decrease in investments into new technologies such as electrification and autonomous vehicles.
“We are already in the midst of an intense global race to lead on electrification and automation. The increased costs associated with the proposed tariffs may result in diminishing the U.S.’ competitiveness in developing these advanced technologies,” said the Alliance.
The U.S. Commerce Department which is investigating new car imports on the national security has said that it hopes to wrap up their investigation either next month or August.