Auto lobby says Trump tariffs are $45B tax on consumersby Justin King
"While we understand that the Administration is working to achieve a level playing field, tariffs are not the right approach," the Auto Alliance says.
The Alliance of Automobile Manufacturers has taken a firm stance opposing President Donald Trump's threat to impose 25-percent tariffs on foreign automobile imports.
The alliance says the tariffs would equate to an estimated $45 billion based on 2017 auto sales. The lobbying group describes the tariffs as a "tax on consumers," which it claims will increase the average price of a vehicle by $5,800 in the US market.
The group also points to a Peterson Institute for International Economics forecast of a 1.5-percent decline in production and 195,000 job losses over a 1-3 year period, while research firm LMC Automotive predicts an annual sales reduction of 1-2 million units.
"While we understand that the Administration is working to achieve a level playing field, tariffs are not the right approach," the alliance said in a statement. "We believe that the economic security of the auto industry and country would be strengthened through modernizing NAFTA to grow US manufacturing and jobs, concluding a US-EU Trade Pact to address trade barriers on both sides of the Atlantic and seeking other opportunities to expand market access for US auto exports."
The Auto Alliance claims to represent 70 percent of all car and light truck sales in the US. Its member list includes BMW Group, Fiat Chrysler Automobiles, Ford, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi, Toyota, Volkswagen Group and Volvo.
So far, the Trump administration has not pushed forward with its threats to place tariffs on foreign auto imports. To be fair, Trump has also called for an elimination of existing tariffs and other barriers to trade between the US and other countries. For now, it is unclear if the auto tariff threat represents an actual policy plan or posturing for further negotiation.