Article Summary –
Trump proposes tariffs of 100% to 2,000% on foreign cars, potentially raising prices for both imported and domestic vehicles and risking job losses, according to Howard Gleckman of the Urban Institute. These tariffs aim to incentivize automakers to manufacture in the US, but could increase consumer costs.
Trump’s Proposed Car Tariffs Could Drastically Increase Prices and Unemployment
Donald Trump, running for president, plans to impose a steep tariff on foreign-made cars entering the US, potentially hiking prices for brands like Ford, Honda, and Toyota, and risking thousands of US jobs, explained Howard Gleckman of the Urban Institute.
Trump proposed a 100% tariff on Mexican-imported cars, stating, “The only way they’ll get rid of that tariff is if they want to build a plant in the US.” During a speech in Georgia, he suggested tariffs as high as 2,000% to force car manufacturers to relocate production to America.
Tariffs would be paid by importers, who might pass costs to consumers. Vehicles from Mexico, such as those manufactured by Ford, GM, and Stellantis, would be targeted, said Reuters.
The average cost of a 2025 Toyota Camry, for example, is $28,400. With a 100% tariff, prices could leap to $60,000, and with a 2,000% tariff, potentially hundreds of thousands of dollars. Similar increases would affect models like the Toyota Rav-4 and Ford F-150, according to ITA.
Trump argues this move would boost US car manufacturing, yet it could inadvertently spike prices for all vehicles, imported or domestic. Consumer preference might shift to US-made cars, encouraging US automakers to hike prices and possibly leading to further inflation.
According to Gleckman, past tariffs on goods often escalated prices for both new and used cars, both domestic and imports. Rather than creating jobs, these tariffs might increase unemployment.
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