- US car dealers warn President Donald Trump’s proposed tax on imported European vehicles would raise prices for consumers.
- “More tariffs won’t help American businesses or families,” says Cody Lusk, president of the American International Automobile Dealers Association.
- Trump has vowed not to back down despite opposition from his own party and members of his cabinet.
US consumers stand to lose big from President Donald Trump’s proposed tariffs on selected imported goods, the American International Automobile Dealers Association (AIADA) said, arguing “the result will be more expensive vehicles” for Americans.
In particular, the group is concerned about Trump’s threat to place a tax on imported vehicles from Europe, which goes beyond a broader threat to impose sharp tariffs on steel and aluminum imports.
AIADA says a tax like this “already exists from a trade war fought in the 1950s.” The association said consumers effectively pay a 2.5% tariff on cars and a 25% tariff on light trucks imported into the US.
“More tariffs won’t help American businesses or families,” AIADA President and CEO Cody Lusk said in a statement. “Tariffs are taxes, and the result will be more expensive vehicles — effectively erasing any positive change Americans saw from the 2018 tax reform bill. Auto sales, which are already slowing, will be hamstrung by these tariffs.
The resulting trade war will undoubtedly spread to include other industries, including American agriculture. No one wins a trade war.”
Stocks, which took a hit on Trump’s announcement last week, rallied Monday as investors hoped his trade threats would prove more bluster than action. Wall Street is praying the president might somehow be talked out of implementing the tariffs given intense opposition from all quarters, including Fed officials, members of his own party and even from inside the cabinet.
US automaker stocks were hit particularly hard on the news, and at least two major firms, GM and Toyota put out statements saying they already purchase most of their steel in the United States.
Trump maintains he is not backing down. He has said the steel and aluminum tariffs will apply broadly and not exempt any countries.
“People have no idea how badly our country has been treated by other countries,” he said. “By people representing us who didn’t have a clue.”
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