President Donald Trump’s plan to impose tariffs on steel and aluminum is indicative of his cluelessness of the slumping auto industry.
According to his announcement, steel products face a 25 percent tariff, with 10 percent on aluminum goods.
Toyota Motor Corp. has made its vexation known over Trump’s plans by pointing out that such tariffs will cause the price of cars and trucks to rise in U.S.
"The administration's decision to impose substantial steel and aluminum tariffs will adversely impact automakers, the automotive supplier community and consumers," Toyota said in a statement obtained by Reuters Thursday.
Shrinking sales in the auto industry in the U.S. has become routine and the administration’s decision will worsen the situation. The automotive behemoth pointed out more than 90% of the steel and aluminum the company needs for manufacturing in the U.S. comes from within the country.
Matt Blunt, the president of the American Automotive Policy Council, also highly disapproves of Trump’s intended measures.
"This would place the U.S. automotive industry, which supports more than 7 million American jobs, at a competitive disadvantage," Blunt said.
Repercussions of Trump’s comments have already began to surface; the Japanese automaker’s shares declined and U.S. carmakers, which were already in a precarious position due to unsatisfactory February sales, saw a further drop in sales.
“These proposed tariffs on steel and aluminum imports couldn’t come at a worse time,” said Cody Lusk, the president of the American International Automobile Dealers Association. “Auto sales have flattened in recent months, and manufacturers are not prepared to absorb a sharp increase in the cost to build cars and trucks in America.”
Biggest car manufacturers across the country are anticipating a swell in cost of raw materials. Ford’s raw materials were projected to cost $1 billion this year but the tariff would add another $300 million to it. General Motors also predicts additional $200 million in costs, following the import measures.
“It’s unfortunate because it comes at a time when there are already fears about inflation. This is only going to add fuel to that fire,” Charlie Chesbrough, senior economist for researcher Cox Automotive, said.
John Bozzella, the president of the Association of Global Automakers, gave credit to the Trump administration when they cut taxes at the end of last year, but noted it might be in vain because these tariffs have the potential to “nullify many of the benefits.”
In the wake of Trump’s announcement, Global Automakers recounted the time when George Bush’s tariff scheme cost economy 200,000 jobs. In the face of such pressing issues, America doesn’t need to be inflicted with economical predicaments like unemployment and inflation.
Banner/Thumbnail Credits: Reuters