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Automakers Await News on US Gov’s Report on New Tariffs, What it Means For You

U.S. Government Reports On Tariffs, Automakers Brace.

The way that the government works can sometimes be a little bit more widespread than it looks on the surface. Sure, one move might have a direct outcome but the results of such a move can spread into all sorts of different areas. Not only can moves change relationships but they can also change the way that money is earned.

Sometimes, sacrifices need to be made now in the interest of the long term greater good and this is where decision making comes into play. Recent talks of tariff hikes could change the automotive industry, as a whole, as prices of almost everything imported will rise. This has an impact not only on imported automobiles but also domestic automakers that use imported components. This begs the question of if it’s all worth it for the long-term prosperity of the nation. These steps will have ripples not only here in the United States but also across the world as President Trump gets ready to come to a decision.

What sacrifices are being made?

Via Autoblog, “A confidential Commerce Department report due to be sent to Donald Trump on Sunday is widely expected to clear the way for the U.S. president to threaten tariffs on imported autos and auto parts by designating the imports a national security threat, auto industry officials said on Friday.”

The report says that the result of a recommendation could be “U.S. tariffs on millions of imported cars and parts of up to 25 percent that many in the industry fear would add thousands of dollars to the cost of vehicles and potentially cost hundreds of thousands of jobs throughout the U.S. economy.” Let’s just say that this is a balancing act that is going to be tough to leave everyone happy, at the end of the day.

What will happen if tariffs increase?

As of now, the talk is just talk but, if imposed, Autoblog continued that “U.S. light-duty vehicle prices would increase by $2,750 on average — including U.S.-built vehicles — reducing annual U.S. sales by 1.3 million units and forcing many consumers to the used car market, the think tank’s report said.”

What is the upside in wanting more expensive imports? Why shouldn’t we always want the lowest price possible?

From the mouth of the president himself, he argues that “Tariffs protect the industry and also help win trade agreements.” Essentially, the idea behind the tariffs is to bolster US manufacturing and give the US leverage in new trade deals. The byproduct of which may be short term employment loss and loss of new vehicle revenue as sales will, more than likely, drop.

As for the long term, I guess we will have to just wait and see. This could certainly be something that opens the doors for the United States to better their position in the global trade ecosystem but could also end up being a proposition that never pans out.

If you’ve ever wondered why our presidents seem to age much quicker during their time in office, making decisions like these really paint quite the picture.

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