Report: 25 Percent Tariffs Would Kill 715,000 American Jobs
The Center of Automotive Research says the tariffs would also reduce American economic output by $60 billion.
The Center of Automotive Research claims that President Donald Trump's proposed 25 percent tariffs on imported vehicles and their parts "will cost Americans dearly." CAR states these price hikes would reduce annual vehicle sales in the United States by two million, resulting in the elimination of at least 715,000 American jobs, and a reduced economic output to the tune of $60 billion.
In its trade briefing, as issued to The Hill, CAR states that the tariffs would reportedly increase the average price of a new vehicle by $4,400, affecting both imported and domestically-built vehicles, the latter group seeing an average of a $2,270 price increase. The price hikes and job losses are identified as base-level consequences, prior to reactionary tariffs imposed on American goods by international trade partners and rivals, which would do additional damage to the U.S.'s economy.
The CAR report also identifies North American Free Trade Agreement countries including the United States, Canada, and Mexico as major sufferers from these tariffs. These three markets make for a reported 54 percent of American-made vehicle exports and 71 percent of parts exports. Sales abroad of vehicles built in the U.S. would suffer due to the aforementioned $2,270 average price increase, as 48 percent of imported car parts reportedly come from Canada and Mexico, and vehicles built in these countries would too face price increases. The report also states that Canadian- or Mexican-built vehicles are more likely to use costly, complex components made in America than abroad, such as engines and transmissions.
"We don't just sell to each other this is kind of a unique relationship in the world… We make things together," commented François-Philippe Champagne, Canada's former minister of international trade, according to The Hill.
Automakers have protested the proposed tariffs. Volvo's CEO directly jabbed the Trump administration at the opening of a new South Carolina manufacturing plant in June. As cited by The Drive's Lawrence Ulrich in his report on the proposed tariffs, even American-grown automaker General Motors spoke out against the tariffs in an official filing with the United States Department of Commerce.
"Increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less—not more—U.S. jobs."