· Some parts and components come from imported tariffs, and the cost of American-made vehicles suddenly increases.
According to CNNMoney, if the Trump administration imposes auto tariffs, the cost of all new cars sold in the US will be higher. Because every car sold in the United States has at least some components imported, the manufacturing cost of the car will increase due to tariffs, and the purchase cost may be higher.
The US Department of Commerce is considering tariffs on cars assembled in foreign factories and foreign-made auto parts. However, according to US government data, a considerable number of parts in every car assembled in the United States come from imports.
Michelle Krebs, senior analyst at AutoTrader, said: "There is no pure American-made car. Global car manufacturers use all types of parts from around the world."
Automakers have warned that tariffs imposed by the United States will increase their own costs. In some cases, the cost per car may rise by thousands of dollars. Last week, General Motors said the company may be forced to lay off employees.
US regulators track the “localization†of each vehicle by measuring the proportion of parts (production) of each vehicle from the United States or Canada.
According to this standard, the two cars with the most "American localization" characteristics are Honda's cars - Odyssey minivans and Ridgeline pickups. Three-quarters of the components of the two vehicles are manufactured in the United States or Canada.
Honda Civic, Acura MDX, Acura TLX and Mercedes-Benz C-class 70% of the parts come from the United States and Canada. The highest-ranking localized car produced by the Detroit automaker is Chevrolet Corvette, ranked seventh, with about two-thirds of its parts and manufacturing coming from the US or Canada.
Tesla is the only car manufacturer that sells all the cars produced in the US factory to the US market. But half of Tesla's parts come from imports.
Almost all of the major major automakers have factories in Mexico that produce cars for the US market in Mexico, so they will pay tariffs on imports from Mexico in the future.
But the US government's tax on parts may double the estimated import costs of these manufacturers: According to the US Automotive Policy Committee (a lobbying group representing the three major auto giants in Detroit), taxing parts will make cars The cost of the manufacturer has increased by $35 billion, and this portion of the tariff does not count toward the $48 billion import tariff imposed on cars assembled outside the United States.
US auto parts manufacturers do not have the ability to make all the parts that are currently imported through imports. Most imported auto parts are produced in Mexico and Other low-wage countries. Therefore, automakers may pass on tariff costs.
Rebecca Lindland, an analyst at Cox Automotive, a market analyst firm, said: "In this tariff program, no one will win, everything will become more expensive."
More expensive cars may mean less sales. According to the US Automotive Policy Committee, US car sales may drop by 1 million to 2 million. This means that car factories in the United States may reduce vehicle production and reduce jobs.
Used cars will also become more expensive. Lindland and Krebs said that if people are forced to withdraw from the new car market, the demand and price of used cars will rise.
The exact increase in car prices is still unclear. Each vehicle has a different combination of parts and components, and the specific tariff amount has not been announced. Automakers may incur part of the cost to ensure sales. However, it is widely estimated that the cost of automobiles will rise sharply.
According to the US Automotive Policy Committee, the cost of a car with 35% of imported parts will increase by $2,000 with a 25% increase in tariffs on auto parts. Toyota estimates that the cost of Camry will increase by $1,800 due to increased tariffs on parts. It is reported that the Camry is produced in the Kentucky factory and is the best-selling sedan in the United States. GM warned that tariffs could force the company to lay off workers at US plants due to expected car sales declines and price increases.
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