U.S. consumers may be getting ready to pay a little extra for their next car purchase as President Trump revs up threats of 25% tariffs on imported cars.
The Trump administration ordered a review of the retaliatory auto tariffs enacted by China and singled out General Motors suggesting they could have prevented the layoffs and plant closures by following the businesses practices of other car companies.
“General Motors is very counter to what other auto, and other, companies are doing. Big Steel is opening and renovating plants all over the country. Auto companies are pouring into the U.S., including BMW, which just announced a major new plant. The U.S.A. is booming!,” the president Tweeted on Thursday.
Actually, Trump may have jumped the gun on that as the automaker has only said that it is considering a new plant.
American International Automobile Dealers Association CEO Cody Lusk told FOX Business’ Susan Li that GM failed to include in their restructuring announcement whether China’s unfair trade practices affected GM’s decision to cut 14,000 jobs over the next two years.
“The president is the one that took that leap and that’s what has us very alarmed on that side of the industry,” he said during on Thursday.
Volvo recently announced a reduction to its hiring plans and scaling back on the auto company’s new assembly plant near Charleston, South Carolina, as a result of the impending higher auto tariffs.
Wall Street Journal automotive reporter Tim Higgins said that Volvo Car Group CEO Hakan Samuelsson voiced his concerned about auto tariffs affecting consumers in the showrooms.
“That cost will be carry over to the pocket books of people buying cars,” Samuelsson shared with Higgins during the Los Angeles auto show on Wednesday.
Japanese-made passenger vehicles imported to the U.S. totaled an estimated $40 billion in 2017 and German-made cars totaled $20 billion in the same year.
Lusk estimates the American consumer will pay an average tax increase of about $7,000 per vehicle on a $35,000 average cost of a vehicle.
“This is a big headwind for the U.S. consumer,” he said.
Trump is set to meet with Chinese President Xi Jinping at the G20 summit this week in Buenos Aires, Argentina amidst the intensifying trade war between the world’s two largest economies.