The proposed tariffs that the Trump government is proposing could have dramatic effects on the auto industry experts say. While not targeted or called out specifically in the US government’s proposals, the ripple effect is real and potentially dangerous for the big North American auto manufacturers.
Many of the giant auto corporations have been aggressively trying to sway the Trump government away from imposing far reaching tariffs on many Chinese imports as they fear that the Chinese government will retaliate with even greater force and impede the auto manufacturer’s plans to expand into the very lucrative Chinese market. The president and CEO of the Association of Global Automakers, Jon Bozzella, is on record as saying that the auto manufacturers understand why the Trump administration is doing what its doing, but strongly feel that there is a better way to go about it and one that won’t hurt the American consumers as much as this current path will.
The new tariffs look to impact goods in the amount of over $50 billion dollars and are primarily focused on three industries, machinery, aerospace as well as information and communication technologies, which are the industries that the US government claims there are unfair trade imbalances.
The auto industry has good reason to be a bit concerned about the implications that the tariffs will have as the President, during his live television broadcast, called out the auto industry as a prime example of the ‘unfairness’ of the current system with China by stating that the Chinese put a 25% tariff on US cars sold in China, while the US only adds a 2.5% tariff on Chinese vehicle imports. He further called out his concerns with how American car companies are developing new technologies in China and the Chinese partners have unfair access to those technologies. For now, most of the North American manufacturers are choosing to stay silent and are hoping that the Chinese government chooses to take a more pragmatic approach to the issues versus scaling up the rhetoric which would only lead to more damage to an already frayed situation.