Trump is not interested in raising the prices of cars. How much will the appreciation
US President Donald Trump said on Saturday that he did not warn the car industry executives not to raise prices with the entry into force on April 2 at the customs duties on foreign cars, telling the NBC News that « I don’t care » if they do.
The measure has sparked criticism from international leaders and concerns about potential price increases for consumers. The duties are part of Trump’s efforts to encourage US production and reduce the country’s trade deficit.
In an interview with NBC News, Trump said his constant duties on cars produced abroad would give impetus to the factories established in the US and is convinced that this move will increase the sales of cars manufactured in the country. « I hope (foreign manufacturers) will raise their prices because if they do, people will buy cars produced in America, » Trump said.
| The president claims that he will only consider negotiating duties if « people are ready to give us something of great value. » |
The affordable compact cars may be the first to go up due to duties. The cost of almost every car will be raised, analysts say, but popular brands such as Toyota, Honda and Subaru are among the most vulnerable, including because they maintain the smallest stocks of cars on US territory.
- The cost of cars that have already jumped 20% after the pandemic are expected to receive a new impetus in the coming weeks and the rise will be thousands of dollars for each car.
- About half of the cars sold in the United States last year are imported and almost all vehicles sold contain parts manufactured abroad.
- New duties will suppress global production and reduce US economic growth at a time when there are already signs of tension.
- Consumers, which make up approximately 70%of the country’s economy, are beginning to withdraw, facing high costs and high interest rates.
- New data on Friday showed that Americans expect inflation to rise to 4.1% over the next five years, the highest prognosis of 32 years, according to a carefully observed study by Michigan University. Common user sentiment also declined for the third consecutive month.
- Further price increases can freeze the sale of motor vehicles and parts that brought about 20%of the growth of the economy at the end of 2024.
« We’ll start seeing prices almost immediately, » Charlie Chesbro, a senior economist at Cox Automotive, told Washington Post, who expects Average wage of $ 6,000 per carS « Some of the most affordable vehicles – compact SUVs, for example – are manufactured outside the country, so they will be most vulnerable. »
“Let’s take a car for $ 40,000 – now it’s a $ 45 thousand car or $ 50 thousand. « said John Luciano, owner of Street Volkswagen, representation of the German company in Amarilo, Texas, where approximately 80% of the cars come from abroad.
There is no way to get around, these duties will be brutal.
John Luciano. Street Volkswagen
« Even if you think, » I’ll just go buy the Ford F-150-the most American car I can think of, « is not really so elementary, » says Joseph Yun, an consumer analyst on the Edmunds automotive research site. « Half parts of this pickup are from Canada or Mexico. »
Increasingly, customers withdraw 84-month car loans, allocating Car payments for seven years instead of the usual threeas a way to compensate for increasing costs and interest rates, said George Glassman, president of Glassman Automotive Group in Southfield, Michigan. An additional pricing jump, he said, will push the purchase of cars even further than the capabilities of many: « This will affect all the brands I sell. Still, no one knows if it means $ 2000, $ 3000 or $ 7,000 more per car. »
This will create an incredible collapse throughout the industry.
George Glassman. President of Glassman Automotive Group
The Trump administration explains that it is difficult for car manufacturers in the United States to « maintain a sustainable local industrial base ». They face shocks in supply and shortage chains, while foreign car manufacturers, « driven by unjust subsidies and aggressive industrial policies, have grown significantly, » the White House said. The new duties would be a step towards the restoration of the automotive industry in the United States.
But economists warn that this process may take years before it begins to produce results.
