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U.S. Metals Tariffs Could Wipe out 50% of Auto Industry Tax Cuts
Between one-third and half of the U.S. tax cuts granted carmakers this year will be offset by costs associated with the Trump administration’s tariffs on imported steel (25%) and aluminum (10%), say Bloomberg News and Nomura Holdings Inc.
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Between one-third and half of the U.S. tax cuts granted carmakers this year will be offset by costs associated with the Trump administration’s tariffs on imported steel (25%) and aluminum (10%), say Bloomberg News and Nomura Holdings Inc.
Their analysis adds that any remaining tax savings would be more than wiped out by the 25% tax on imported cars being contemplated by President Donald Trump.
The metals tariffs represent an overall annual cost of about $11 billion, most of which does not apply to the auto industry. But Bloomberg says the would-be levy on foreign-built cars would amount to about $73 billion per year—all of it borne by carmakers.
Bloomberg figures that vehicle manufacturers aren’t likely to alter their supply chains because of either set of tariffs, which they expect to be temporary. In the meantime, the news service estimates, the average price of an imported vehicle could rise $5,800.
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