President Trump’s tariff of 25 percent on imported vehicles, which came into effect last week, sends vibrations through the auto industry, prompting companies to stop charging cars to the United States, closing factories in Canada and Mexico and the demobilization of workers in Michigan and other states.
Jaguar Land Rover, based in Britain, said it will temporarily stop exporting its luxury cars to the United States. Stelantis cleared factories in Canada and Mexico that make Chrysler and jeep and infiltrate 900 American workers who provide these factories with engines and other parts.
Audi, the luxury section of Volkswagen, stopped car exports to the United States from Europe, and I asked merchants to sell everything they still have to cut.
If other car makers make similar movements, the economic impact may be severe, which leads to the high prices of cars and the layoffs of workers on a large scale. The customs tariff for cars is among the first many fees for the industry enjoyed by Mr. Trump in his eyes and can provide early evidence about how companies respond to his commercial policies, including whether they raise prices or increase manufacturing in the United States. The president said he also wanted to impose taxes on drug imports and computer flakes.
The application of the new tariff to imported cars may increase their cost to consumers with thousands of dollars, which sharply reduces the demand for those vehicles. For some Jaguar Land Rover or Audi, the tariffs may reach more than $ 20,000 per car.
Although many of the initial influences of the definitions were turbulent, Mr. Trump’s duties in at least one had the intended impact to increase production in the United States. General Motors said late last week that he would increase the production of light trucks at a factory in Fort Wayne, Indiana.
The long -term influence of the 25 % definitions is unclear. Many car manufacturers are still trying to know how to avoid increasing prices to the extent that consumers can no longer have the costs of new cars. Investors are pessimistic. Ford Motor, GM and Tesla shares have decreased in the past few days of trading.
“Everyone in the supply chain of cars is focused on what they can do to reduce the effect of tariffs on their public budgets and prices,” said Kevin Roberts, director of economic intelligence and market at Cargurus, an online shopping site.
But car makers have not had previously had to deal with the imposition of such high definitions with such a small notice. They also did not have little insight about what the president would do after that, analysts and merchants said.
“The traditional play book is not enough,” said Liny Laoka, who leads the KPMG car manufacturer.
Mr. Larocca expects that automotive companies will focus increasingly on the production of larger sports interest cars and small trucks. These vehicles, which are collected in American factories, are usually the most profitable and companies give more space to accommodate the cost of definitions instead of transferring them to customers.
Many modern assembly lines can produce many models, giving companies flexibility to switch to the most profitable vehicles and give up vehicles that do not make much money. Mercedes -Benz said she would benefit from flexible assembly lines at her factory in Alabama.
This strategy comes with negative aspects. It may be difficult for a car buyer to find new cars at moderate prices. Indeed, the average price of a new car is approximately $ 50,000.
Analysts say this is clear: the definitions will not push companies to open new factories or reopen closed plants immediately. Companies will not take this very expensive step until it is sure that the definitions are permanent and that the investment of hundreds of millions – or billions – of dollars in a new production capacity that will be paid.
“I haven’t seen any major moves,” said Mr. Laoka. “It is waiting and see.”
Some car makers and suppliers expanded their American operations before Mr. Trump took office. Often, they were interacting with the Korona virus on the pace of the Corona virus, when it became risky to rely on factories away from the critical parts. Others have made large investments in factories that make electric cars or EV batteries to take advantage of the incentives offered by the Biden administration.
ZF, German spare parts maker, spent $ 500 million last year to expand a factory in South Carolina, producing a transition to BMW and other car manufacturers. In recent years, General Motors has opened two new batteries in the United States with a South Korean partner, LG Energy Solution, to make the most important component of electric cars.
In the short term, some foreign car makers may stop to send vehicles to the United States, either because they can no longer make profit or because they can earn more money anywhere else. This may be the case with Jaguar Land Rover. The company, known as luxury sports facilities made in Britain, sells about five cars in the United States.
If other companies stop selling certain models for Americans, consumers will have a lower number of vehicles to choose from and the remaining car manufacturers will have more bracelet to raise prices.
However, the definitions have not yet led to a wide increase in prices for new cars. Hyundai Motor said last week that it will not raise the proposed retail price of Hyundai and Genesis until June 2.
Of course, car traders can raise prices even if the auto manufacturer pledges not to do so. This happened a lot during the epidemic, when the provision of new vehicles was limited due to the lack of computer chips and other parts.
Car dealers and auto companies have reported quick sales in recent days, as people rushed to buy vehicles before entering customs duties. The average time decreased by a vehicle on a lot of 77 days at the end of January to less than 50 days at the beginning of April, according to Carburus.
Sean Hogan, Vice President of the Sierra Motor Group, who owns dozens of agents in southern California, said that the demand was especially high on Japanese brands such as Honda, Sobaru and Nissan, apparently because buyers assume that it is imported. All three Japanese companies have factories in the United States, although they import some cars.
Another introductory shock will come on May 3, when the Trump administration will apply the customs tariff to auto parts. This means that even the cars made in the United States will be affected because almost all compounds contain ingredients from the outside. The repairs will also become more expensive.
Mr. Hogan said: “The educated audience is certainly some moves to advance the definitions, which I think is smart.”
He said that the long -term impact of Mr. Trump’s commercial policies is still impossible. “This administration moves very quickly, and you don’t really know what will happen after that,” added Mr. Hogan. “buckle.”
Neil E Bodit and Melissa Edi The reports contributed.