Major automakers are bullish on the outlook for the U.S. economy and auto sales, but one big question remains - will President Donald Trump throw a grenade into the sector by imposing sweeping tariffs of up to 25 percent on car and auto parts imports, ONA reports citing Reuters.
The industry is in “wait-and-see mode,” but the tariffs would be a bad idea, Bob Carter, head of U.S. sales at Toyota Motor Corp, told Reuters on Wednesday.
“If the tariff happened on the auto industry, quite frankly that’s pulling the pin out of the grenade,” he said at a conference on Tuesday held in conjunction with the New York International Auto Show. “I don’t believe the U.S. economy can run out of the room fast enough if that happens.”
Carter said in an interview he was optimistic the Trump administration would decide against tariffs, yet “uncomfortable” given the president’s decision last year to impose tariffs on steel and aluminum imports.
Trump ran for office in 2016 on a protectionist platform aimed at shoring up U.S. manufacturing jobs. He has said in the past he was considering tariffs on autos and auto parts of up to 25 percent.
In February, the U.S. Commerce Department sent recommendations to Trump, which auto industry officials expect to include at least some tariffs on fully assembled vehicles or on critical technologies and components related to electric, automated, connected and shared vehicles.
Such tariffs would have a deeper impact on car prices and consumers than earlier metals tariffs that were imposed. The steel and aluminum tariffs cost Detroit automakers General Motors Co and Ford Motor Co $1 billion each and Fiat Chrysler Automobiles NV said they could add up to $350 million in costs in 2019.