- Automobile actions, notably General Motors and Stellantis, have plummeted while manufacturers were waiting for President Trump’s last price announcement on Wednesday. The Dow Jones US Auto Manufacturers index fell 5% while Tesla d’Elon Musk fell 5.6%. Industry estimates have collected price increases of up to $ 10,000 due to the impact of levies.
President Trump has advanced new prices on foreign manufacturing cars and 25%light trucks, he announced on Wednesday at the Oval Office. The new prices will be launched on April 2 “and we will start to collect on April 3,” said Trump, adding that the samples would not hit cars built in the United States
“This will lead to the construction of many plants, in this case, many car factories,” said Trump at the press conference. Trump said he was expecting prices to increase an increase in automotive manufacturing in the United States that would lower consumer prices. He also suggested that the White House could move forward with plans to allow consumers to deduct interest payments on car loans of tax bills if the car is made in the United States
“I think our automotive company will flourish as if it had never spoken before,” said Trump. He said “very strong” police would go with the 25%automotive rates. “It’s permanent. 100%,” said Trump.
The prices were initially to take effect on March 4, but Trump announced later adjustments On imports from Canada and Mexico to reduce the compression of American car manufacturers and give them time to prepare. The administration had imposed 25% of imports on the goods of Canada and Mexico, but authorized the break for cars and goods exchanged through the North American USMCA trade agreement. Trump then established a deadline of April 2 for having announced additional prices and reciprocal prices on cars imported into the United States, but he reversed the course and abandoned the tariff announcement a week earlier.
The one -month -old grace period on 25% prices on cars and car parts occurred after Trump spoke to Ford, General Motors and Stellantis representatives. Trump also widened the grace period for other goods from Mexico and Canada. At the time, Trump told companies to “start investing, starting to move, changing production here”.
However, the experts said that the extension of automotive parts prices with steel and aluminum would result in heavy costs for consumers, car manufacturers and their suppliers. In addition, the adjustment of a manufacturing supply chain often takes years, not weeks, experts said. About one in five in five cars sold in the United States were built in Canada or Mexico, the Associated Press reported. In 2024, the United States imported a value of $ 79 billion in Mexico vehicles and $ 31 billion more in Canada. As for automotive parts, $ 81 billion in imports are from Mexico and $ 19 billion in Canada.
“The prices announced today harm – not to help – the American automotive industry, endanger many American jobs and will lead to a hollow of automotive manufacturing in the United States,” said John Murphy, Vice -President of the US Chamber of Commerce Fortune. “These car rates are presented on steel, aluminum and goods from Canada and Mexico prices. With additional reciprocal prices expected on April 2, the stacked prices in the automotive sector are great. ”
Ken Kim, main economist in Kpmg, wrote on Wednesday note This vehicle and parts order had jumped 4% in February, the largest increase in three years. The increase was due to the frontal race in the automotive industry to lock prices before prices could take effect. Industry estimates have set prices on new vehicles in a range of around $ 2,000 to $ 10,000 or more, which would represent a 20% increase in the average transaction price of $ 48,500, Kim wrote.
“Consumers are already in shock from high inflation,” wrote Kim. “Talk about stickers.”
Overall, spending dropped 0.3% in February, the most significant decline in seven months, according to Kim, and this is due to uncertain economic prospects.
“The decline could be an early indication that business leaders are retreating to future capital expenses due to the uncertain price environment.
According to Scott Lincicome, vice-president of the general economy at the Think Tank Libertarian Cato Institute, car rates would not only increase cars prices, but they would injure American car manufacturers. It has long been recognized by experts in the automotive industry that free trade and investment have fueled the growth and stability of the automotive industry since the 1990s, he wrote.
“This is why, when Trump threatened new prices on car products in 2018, mainly all major American activity groups – the alliance of car manufacturers (which includes Detroit Automakes), the association of world car manufacturers, the association of manufacturers of engines and equipment, has opposed the National Association of Manufacturers, the American Chamber of Commerce.”
This story was initially presented on Fortune.com
