A study revealed that a large SUV with mostly Mexican content could see a price increase of nearly $9,000, while a truck would experience an increase of $8,000 if tariffs as announced by President Trump are implemented. The Anderson Economic Group indicated that this would have a negative impact on car sales.
According to Anderson, manufacturers might shift some of their production to the United States, but they would likely have to stop selling certain versions of trucks made in Canada and Mexico, leading to the disappearance of certain models and equipment.
The tariffs proposed by Trump on Canada and Mexico could lead to an increase in costs that would be passed on to consumers, reflecting a decrease in sales of the most affected models. This cost increase, according to Patrick Anderson, CEO of Anderson Economic Group, would negatively impact the affordability of automobiles.
General Motors Co., Ford Motor Co., and Stellantis NV have warned about the severe economic consequences of the proposed tariffs. Manufacturers might stop producing certain models in Canada and Mexico and move production to the United States, which would mean that some vehicles would cease to be manufactured temporarily.
The price increase of American automobiles due to the proposed tariffs would create additional pressure on consumers and could affect the automotive supply chain across the region. This situation could lead to a price increase of up to $12,000, wreaking havoc in the automotive industry.
Dan Hearsch of AlixPartners estimates that car sales in the U.S. could drop by half a million vehicles. Automakers are preparing to face the consequences of the tariffs by accumulating supplies and pressuring suppliers to raise inventories.
Executives in the automotive sector are concerned about the potential impact the tariffs will have on company profits. Uncertainty regarding the implementation of the tariffs has led manufacturers to take precautionary measures, such as securing storage space in the U.S. to safeguard engines and finished parts. The situation has raised concerns in the industry regarding Trump's promises about curbing inflation and ensuring economic stability.
