Car manufacturer Toyota (NYSE:TM) announced recently that a 25% tariff on automobiles would lead to higher costs for every vehicle that is sold in the U.S.
Toyota stated, “A hundred and thirty-seven thousand Americans support their families working for Toyota, and Toyota and Lexus dealerships. They are not a national security threat. Indeed, Toyota operates 10 manufacturing plants in the U.S. We are an exemplar of the manufacturing might of America.”
The company (NYSE:TM) gave an example using its Toyota Camry, and said that the price of that vehicle, would rise $1,800.
It was in May that President Trump had asked the Commerce Department to see whether car imports were a threat to national security. The investigation is supposed to be completed this summer and Trump tweeted that the Department was almost done.
“We believe the only plausible outcome of this investigation is to reject the notion that automotive imports threaten national security,” Toyota stated.
“Tariffs on imported cars, parts would be broadly credit negative for industry,” remarked Moody’s Investors Service.
The Alliance of Automobile Manufacturers has also said that a 25% tariff on car imports would cost consumers in the U.S. $45 billion a year.
Trump has tweeted, “Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!
According to Frank Ursomarso, a longtime car dealer, “What you’re seeing is posturing. The tariff will be something less. But it will be a price increase that either the manufacturers have to offset with incentives, or we will just sell fewer of them.”
“I don’t like it at all,” is what Jim Hardick had to say. He is the co-owner of Moritz Dealerships in Texas. He added, “It’s going to hurt our business. That would be a game changer for most people.”
Mazda also recently spoke out against the tariffs, a car manufacturer that doesn’t have any U.S. factor. The company said, “A tariff is a tax and it will be paid by American consumers. It will significantly increase the cost of every new vehicle sold in America, regardless of where it is built. As Mazda begins construction of our new auto factory in Huntsville, Alabama, we urge the Commerce Department to reject the premise that auto imports are a threat to national security.”