- President Donald Trump has reduced concerns That its automatic tariffs will cause car manufacturers to raise prices, saying they can’t worry less if they do. In an interview with NBC News, he added that, “I hope they will raise their prices, because if they do, people will buy cars made by America.” But even cars collected in the United States have parts of abroad.
President Donald Trump said his new automatic tariffs were constant and reduced concerns that they would cause carmakers to raise prices.
In Interview with NBC News On Saturday, he was asked about recently Wall Street Journalournal A report saying he warned CEOs not to raise prices while discussing tariffs with them.
“No, I never said that. I couldn’t worry less if they raise prices, because people would start buying cars made by America,” Trump replied.
He added: “I couldn’t worry less. I hope they raise their prices, because if they do, people will buy cars made of America. We have a lot.”
Trump later said that if foreign car prices go up, then consumers would buy American cars.
He also confirmed that the tariffs are here to stay, saying: “Absolutely, they are constant, confident. The world has torn the United States in the last 40 years and more. And everything we are doing is fair, and honestly, I’m very generous.”
Foreign exchange parts from abroad will also be affected by a 25%tariff, but vehicles and parts imported under the US-Mexico-Canada Trade Agreement will not see their duties until the government has established a process to impose them, the White House said.
While more than half of the value of car imported parts came from Mexico and Canada last year, over $ 70 billion comes from areas not covered by the US Pact, including Asia and Europe, according to International Trade Association data. Quoted by the Associated Press.
US and foreign carmakers have closely integrated supply chains that extend to North America. During the production process, cars and parts can cross between the United States, Mexico and Canada many times.
Even Trump’s ally Elon Musk warned that Teslawho produces all its cars sold in the US at home, will be affected by automatic tariffs.
Vedbush’s Securities Analyst Dan IVS has estimated that Car prices could rise by $ 5,000 to $ 10,000 Due to automatic tariffs, depending on whether the vehicle is a brand of mass market or premium.
“Every carmaker in the world will have to raise prices in some form of sales in the United States, and the logistics of the supply chain of this tariff announcement they have heard all over the world are difficult to put our hands at the moment,” he wrote on a research note on Friday.
While the White House said the tariffs are aimed at revitalizing the US industrial base, IVS is skeptical that car production can be completely rethinked.
This is because even cars built in America are equipped with foreign parts and components that make up 40% to 50% of their value.
“The American car with all US parts made in the United States is a fictional story that is not even possible today,” he added.
This story was originally shown on Fortune.com
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