US President Donald Trump
Credit: Reuters Photo
President Donald Trump announced that he would impose a 25 per cent tariff on cars and car parts that were imported into the United States. The tariffs which are set to take effect on April 3 are seen as a tool for economic policy.
These new tariffs apply to both finished cars and trucks that are shipped into the United States and to imported parts that are assembled into cars at American auto plants. This will impact foreign brands as well as American ones that build some of their vehicles in Canada or Mexico.
However, in a recent leaked conversation between Trump and leading auto industry executives, as reported by the Wall Street Journal, Trump cautioned them against raising vehicle prices in response to his new tariffs.
According to the report, Trump held a call earlier this month with auto executives and warned them of even heftier tariffs if they raise prices because of the import taxes.
While Trump has maintained that the tariffs will revive domestic production without having a negative impact on prices, experts have voiced their concerns that the increased tariffs risk consumers having to pay thousands of dollars more for vehicles.
Trump on the call said that they "should be grateful" for eliminating what he called former President Joe Biden’s electric-vehicle mandate, as per the report.
He also detailed how US automakers would benefit from the increased tariffs. Trump further added that he was bringing manufacturing back to the US.
The American Automotive Policy Council reportedly said that US automakers support Trump's plan to increase jobs in the country while asserting that it was "critical that tariffs are implemented in a way that avoids raising prices for consumers.”
President of the council Matt Blunt, as per the report, said it was “difficult to see how imposed tariffs over time would not have some impact on prices.”
However, Trump in an interview with NBC News denied warning car industry executives against raising prices as tariffs on foreign-made autos come into force. “I couldn’t care less,” Trump said.
"I hope they raise their prices because if they do, people are gonna buy American-made cars," Trump added.
(With Reuters inputs)