US’ tariff on imported passenger vehicles likely to cost domestic consumers $45 billion

An automotive trade group believes that US’ tariff of up to 25 per cent on imported passenger vehicles if imposed, will likely cost domestic consumers US$45 billion annually or US$5800 per vehicle.

Gloria Bergquist, the national spokesperson for auto industry on environmental and safety matters, said, “Nationwide, this tariff would hit American consumers with a tax of nearly $45 billion, based on 2017 auto sales. This would largely cancel out the benefits of the tax cuts.”

On Tuesday, June 26, the automotive trade group reported that it would warn the Trump administration about the passenger vehicles price hike on the imposition of imported vehicle tariff. “The alliance of automobile manufacturers, a group representing General Motors Co, Toyota Motor Corp, Volkswagen AG and other major automakers will file written comments with the US Commerce Department later this week,” said Ms. Bergquist.

She also said Trump’s decision to impose a steep tariff on imported vehicles would cost the imported auto parts higher as well when buying vehicles both from the US and foreign automakers.

On Friday, June 22, the US President threatened to impose a 20 per cent tariff on the European Union-assembled imported cars in response to the heavy duties on its US$3.2 worth of products by the EU.

Trump tweeted, "Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!"