Auto tariffs expected to cut sales by millions, cost $100 billion
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Autoworkers at Nissan’s Smyrna Vehicle Assembly Plant in Tennessee, June 6, 2022. The plant employs more than 7,000 people and produces a variety of vehicles, including the Leaf EV and Rogue crossover. Michael Wayland / CNBC DETROIT — As President Donald Trump’s 25% tariffs on imported vehicles remain in effect despite a pullback this week on other country-based levies, analysts are expecting massive global implications for the automotive industry due to the policies. They’re expecting to see a drop in vehicle sales in the millions, higher new and used vehicle prices, and increased costs of more than $100 billion for the industry, according to research reports from Wall Street and automotive analysts. “What we’re seeing now is a structural shift, driven by policy, that’s likely to be long-lasting,” Felix Stellmaszek, Boston Consulting Group’s global lead of automotive and mobility, told CNBC. “This may well be the most consequential year for the auto industry in history – not just because of immediate cost pressures, but because it’s forcing fundamental change in how and where the industry builds.” BCG expects tariffs to add $110 billion to $160 billion on an annual run rate basis in costs to the industry, which could impact 20% of U.S. new-vehicle market revenues, increasing production costs for both U.S. and non-U.S. manufacturers. The Center for Automotive Research, a Michigan-based nonprofit think tank, believes costs for automakers in the U.S. alone will increase by $107.7 billion. That includes $41.9 billion for Detroit automakers General Motors, Ford Motor and Chrysler parent Stellantis. Both analyses take into account the 25% tariffs on imported vehicles implemented by Trump on April 3 as well as forthcoming levies of the same amount on automotive parts that are set to begin by May 3. Stock Chart IconStock chart icon Auto stocks Automakers and suppliers…
Filed under: News - @ April 12, 2025 1:23 pm