U.S. President Donald Trump’s threat has escalated, imposing tariffs on neighboring countries, the EU and automakers, which has taken the auto industry a tough blow. Shares traded in some of Europe’s largest automakers on Friday, a huge loss in the last session after Trump raised the chances of 25% tariffs on European cars and other goods. The announcement marks the latest news in a range of trade measures that appear to be aimed at rebalancing the U.S.’s favorable economic order. Trump has previously said he intends to impose an automatic tariff of about 25% from April 2, adding that those responsibilities may be “much higher” over the course of the year. It is unclear whether these measures apply to all vehicles entering the country or targeting a specific country. Analysts expect auto levies will have a profound impact on the automotive industry, citing a strong reliance on manufacturing across North America (particularly Mexico) and in complex global supply chains. Rico Luman, a senior economist at the Dutch Bank Ing, told CNBC during a video call. “Ultimately increasing costs is a problem, because it is almost unimaginable that all production will be transferred to the United States,” Luman said. Who will suffer the least amount of pain? Since taking office, Trump has repeatedly raised the threat of tariffs, trying to tax foreign goods as a core part of his economic agenda. Trump said last week that in addition to the U.S. tariffs on automakers and the prospects for tariffs on automakers, he proposed a 25% tariff on Mexico and Canada to take effect on March 4. China is already facing a 10% tariff, and is expected to charge an additional 10% tariff on the same date. Ing’s Luman said the increased uncertainty over the rollout of U.S. tariffs are causing auto executives to make long-term and often expensive strategic decisions over the long term. : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : “This may prompt further investment in American manufacturing capacity, as some automakers, such as Volkswagen and Stralandis, have already started to do it.” “For automakers such as BMW and Mercedes, which already have a large amount of U.S. production, higher tariffs could impact their export strategies if the EU is to retaliate, and potentially reduce productivity and limit U.S. export revenues themselves,” Suskin said. In response, a Mercedes spokesman told CNBC that the overall trend in protectionism would “have negative economic consequences for all stakeholders involved.” The company said it is closely monitoring further developments but declined to comment further on any speculation about tariff levels. CNBC also contacted BMW for comment.
Auto giants fight for least suffering amid Trump tariff threat | Real Time Headlines
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