Ready for sticker shock? The auto industry says 25% tariffs on imported vehicles, will lead to buyers paying a lot more. The average price will jump about $5,800 according to automakers.
They warn sales will plunge by up to two million vehicles, which could ultimately lead the industry to cut 195,000 jobs.
Mike Jackson, CEO of Autonation, says, “This will unleash, if it comes about, a real trade war because the numbers are just so much bigger.”
For the auto industry, tariffs could kill one of the longest, most successful periods it’s ever experienced. GM and Fiat Chrysler have gone from bankruptcy to record profits, and auto manufacturing jobs in the U.S. have rebounded to pre-recession levels.
Thanks in part to a record number of autos being exported. Still President Trump wants Europe and China to lower tariffs on the models being shipped overseas or the seven million cars and trucks being imported to the U.S. could be slapped with hefty tariffs.
According to Jackson, “It will raise prices dramatically for consumers in the United States. It will be inflationary, ultimately it will slow down sales.”
Right now, those buying a new car or truck are paying, on average, just over $32,000.
This has experts questioning how much more would Americans pay for a particular model if the price suddenly spiked because of a border tax? A couple thousand dollars? Five thousand dollars?
It’s a guessing game, the auto industry is hoping it won’t have to play.