A proposed U.S. import tariff could add as much as $17,000 to the price of vehicles imported into the country, an American research firm has determined.
Jaguar-Land Rover would be hit hardest of any auto manufacturer, because it imports every vehicle it sells in the U.S., reports Bloomberg News, referencing conclusions from a “thought exercise” carried out by Michigan-based market research firm Baum & Associates LLC.
Meanwhile, homegrown car makers like Ford and GM stand to be affected least: the paper suggests Ford would need to increase its prices by $282, and GM by $995. Electric car superstar Tesla, whose operations are entirely contained in the U.S., would be unaffected.
Among the other manufacturers that would be hit hardest are Volvo, Mitsubishi, and Mazda, none of which have any vehicle production facilities in the U.S. But the research firm suggests automakers are unlikely to pass the entire cost of an import tariff onto consumers, meaning the manufacturers’ bottom lines would take a hit. That could prove damaging to relatively small companies like those three.
U.S. president Donald Trump has said he is “warming up” to the idea of a border tax that originated in the U.S. Republican congress as a means to encourage companies to bring outsourced manufacturing operations back home. The proposal is seen as particularly antagonistic to Mexico and the many manufacturers that have set up factories there as a way to cut production costs.
While there is an obvious appeal to the idea of repatriating vehicle manufacturing, companies like Toyota and Wal-Mart say the import tax will make many things, like clothing, cars, and gasoline, more expensive for average Americans.
American import tariffs could affect Canada, too, and will likely be among the topics Prime Minister Justin Trudeau dicusses with Trump at a Feb. 13 meeting at the White House.