Trump's auto tariffs spark industry price hike fears
On April 2, a 25% tariff on all cars and light trucks imported into the USA will take effect. Donald Trump denied encouraging car manufacturers to maintain prices after the tariffs are implemented. "I couldn't care less if they raise prices," he declared.
Donald Trump was asked on NBC News whether he pressured car manufacturers to keep prices stable after the tariffs took effect; he strongly denied it. "No, I never said that. I couldn’t care less if they raise prices, because people are going to start buying American-made cars. I hope they raise their prices, because if they do, people are gonna buy American-made cars. We have plenty," Trump said.
He also emphasized that his message to the heads of automotive companies was different: "Congratulations, if you make your car in the United States, you're going to make a lot of money."
The Wall Street Journal reported that the US president was in talks with the heads of car manufacturers. He reportedly warned them that if they raise prices, he will further increase the tariffs.
Car tariffs in the USA from April 2
The journal reported that Trump was firmly convincing the heads of automotive corporations that they would benefit in the long term from the American tariffs. The Wall Street Journal cited two people involved in the conversation with Trump.
Despite Trump's assurances, car manufacturers in the USA are concerned that the new fees will force them to raise prices. Experts from Morgan Stanley predict that vehicle prices may increase by 11-12%. Experts cited by Bloomberg also indicated that customers might lose due to Trump's tariff decision. "Consumers will be losers because they will have reduced choice and higher prices," evaluated Sam Fiorani from AutoForecast Solutions, as quoted by Bloomberg.
Bloomberg, however, pointed out that one company will likely emerge victorious from this situation: Tesla, owned by Elon Musk. "Major rivals from South Korea’s Hyundai Motor Co. to Germany’s Volkswagen AG and America’s own General Motors Co. meanwhile will soon face sharply higher costs," highlighted Bloomberg.
Let us recall that in response to the decision on the 25% tariffs on cars, Canada announced retaliatory measures. The USA's neighbor is expected to be one of the biggest losers from Trump's decision.
