Analysts: Trump's new tariff threats would damage U.S. auto industry | Michigan Radio
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Analysts: Trump's new tariff threats would damage U.S. auto industry

May 31, 2019

San Ysidro Border Crossing
Credit Phil Konstantin / Wikimedia

Auto analysts say new tariffs against Mexico threatened by President Donald Trump would be  damaging to the auto industry, and make vehicles more expensive for consumers.

Trump has threatened to slap escalating tariffs on Mexico until that country stops undocumented immigrants from reaching and crossing into the U.S.

Michelle Krebs is an analyst with Autotrader.

"It would be damaging particularly to the American car companies," says Krebs. "General Motors and Fiat Chrysler both bring full-size pickup trucks, which are their big cash cows, across the border and any time you add cost, that typically means a price increase, and when you increase the price, sales typically go down."

Krebs says the tariffs could also derail the administration's own free trade agreement with Mexico.

Trump says he could start with a 5% tariff on goods from Mexico starting next month, and ratchet up to 25% by October if Mexico does not stop the flow of immigrants coming to the U.S.