Trump’s tariff can crush the American auto industry – and about half of American consumers with it

• The new definitions may be disrupted by more than 300 billion US dollars in the annual American auto trade with Canada and Mexico.
• The cost of the car may increase by $ 4,000 (about $ 6,000 Australian dollars) for standard cars and up to $ 12,000 (about $ 19,000 Australian) for some models.
• The prices of cars, which are $ 50,000, will become unimaginable for 40 % of Americans.

The American auto industry may soon face a financial punch, and this time, this is not due to the problems of the supply chain or semiconductor deficiency, but because of US President Donald Trump The latest procedures. Trump suggested a 25 % tariff for all imports coming from Canada and Mexico, and this decision may lead to raising car prices by up to $ 12,000 (about $ 19,000 Australian), making the first American auto industry in this escalating trade war.

A tariff that provokes the chaos of the supply chain

Trump’s new policy is not only related to import duties – it also increases mineral definitions and this panic may be sent throughout the industry. Because of the disposal of exemptions on metal tariffs (25 % on steel and 10 % on aluminum) and increasing the imposition on aluminum to 25 %, American auto companies now face a 50 % common duty on steel and aluminum imported from Canada and Mexico.

Both countries are major suppliers, and this step threatens to disrupt more than 300 billion US dollars in the annual American auto trade with its neighbors and increases the smoothly -long supply chain for decades.

According to the analysis before Anderson Economic GroupThe cost of building a standard cross vehicle will increase by at least $ 4000 and electric cars, the effect may be three times this amount. Common models such as Chevrolet Silvrado Beck App and Ford Bronco Sport SUVs may be seen an increase in prices approaching $ 10,000 – bad news for an industry that is already struggling with the ability to withstand costs.

The effect of industry and consumer

The timing of these definitions cannot be worse. Car sales have already been a great success and January witnessed the largest decrease in consumer spending on inflation for nearly four years. New cars prices 34 % has increased since 2019Which pushed the average cost to $ 50,000. Meanwhile, the prices of used cars are also expected to rise as the number of people who can afford trade in their cars can rise.

Venkatesh Prasad, the first vice president to search at the Automobile Research Center, said, said, ” AP On the ability to withstand increased costs, saying that a decade ago, only 20 % of Americans than Americans, but today, this number doubled to 40 % of the population.

Trump is convinced that these definitions will encourage manufacturers to transfer production to the United States and link policy to broader issues such as controlling immigration and trafficking in fentanel.

But analysts oppose this argument, noting that among the 21,000 pounds of fentanel that was seized last year, less than 50 lbs from the Canadian border was arrested. Regarding the efforts made to enhance local manufacturing, they fear that high costs will lead to an increase in production expenses, which will lead to an increase in car prices. As a result, fewer consumers may purchase cars, leading car manufacturers to reduce production, which may eventually lead to thousands of job losses in the auto sector.