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The average price of new vehicles will increase $5,800 if President Trump implements his proposed 25 percent tariff on imported car models, auto industry representatives say.
The price prediction comes from The Alliance of Automobile Manufacturers, a trade group representing domestic and foreign automakers with plants in the United States. They predict that the new tariffs would amount to a $45 billion tax on the auto industry.
“Tariffs will lead to increased producer costs, increased producer costs will lead to increased vehicle cost, increased vehicle costs will lead to fewer sales and less tax receipts, increased vehicle costs will lead to fewer sales will lead to fewer jobs, and those fewer jobs will significantly impact many communities and families across the country,” the alliance stated in a letter to the Commerce Department on Wednesday, according to CNBC.
The department is investigating whether auto-related imports pose a threat to national security. If they do, President Trump will then be able to justify his new tariffs on imported autos.
Last week, Trump threatened to tax European-made vehicles if the EU did not drop its newly imposed tariffs on select American products like orange juice, bourbon, denim and Harley Davidson motorcycles.
“Based on the Tariffs and Trade Barriers long placed on the U.S. & its great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump tweeted.
Top advisors and industry leaders had difficulty dissuading the Trump administration from imposing the tariffs and causing a trade war, reports CNBC.
