Tariffs on Foreign Automakers Could Backfire In Job Losses
Still upbeat, the US auto industry faces sales lulls and the uncertain impact of ride-sharing, self-driving vehicles and a potentially devastating looming subprime auto financing bubble.
The Trump trade war with foreign carmakers adds to industry agita by threatening American jobs throughout the mid-South and elsewhere, dousing fast growing US car sales abroad, especially China, and creating havoc for dual-national combines like Fiat Chrysler Automobiles.
We have very little leverage in this auto trade war which could impose tariffs up to 25% on foreign carmakers. The American Automotive Policy Council translates this to an $83 billion tax on the US auto industry.
Mercedes-Benz, BMW, VW, Volvo, Toyota, Nissan, Honda, Hyundai, Kia and Subaru have invested hundreds of billions into US design and manufacturing infrastructure. They employ hundreds of thousands of American workers directly and many more in supply and accessory industries, as well as the general economic echo effect.
These facilities have emerged as global export platforms and have transformed the economy and cultural life of struggling American regions. While the tough tariff talk might be a negotiating tactic, plant slowdowns and layoffs could prove a costly bluff.