The Detroit News recently published an editorial detailing how proposed tariffs being considered by the Trump Administration on steel and aluminum will drive up the cost of automobiles and light trucks, hurting consumers. The proposed tariffs are designed to bolster U.S. steel and aluminum production, but would add hundreds or thousands of dollars to the price of a new vehicle.
The editorial points out that the tariffs, if approved, would hinder the President’s announced goal of sustaining an annual economic growth rate of 3% or more and would negate the positive impacts of the tax cuts passed in December 2017. The President has said the tax cuts will encourage manufacturing jobs to return to the United States, but the editorial predicts that companies that rely heavily on steel and aluminum will, instead, look to countries that don’t inflate prices with tariffs and import limits.
The Trump Administration, in talks with Mexico and Canada to renegotiate the North American Free Trade Agreement (NAFTA), has also suggesting using tariffs to punish automakers for importing vehicles instead of making them in the U.S., and forcing them to increase the content of made in the U.S. components. However, like the steel and aluminum tariffs, such protectionist measures will lead to dramatically higher consumer prices.
To read the editorial in its entirety, visit http://www.detroitnews.com/story/opinion/editorials/2018/02/20/tariffs-will-hurt-autos-workers/110646950/.