How a Trump tariff could sideswipe US auto industry
DETROIT — The threat from President Donald Trump to tax Mexican-made cars sold in the U.S. would throw the auto industry into disarray, analysts say, forcing some uncomfortable choices: Raise car prices or swallow the cost. Stop selling Mexican-made cars in the U.S. but risk losing customers. Move production to the U.S. but make less money.
“I don’t think the auto industry would turn up its feet and die, but it would be a terrible shock. It would create mayhem with their profitability,” said Marina Whitman, a business professor at the University of Michigan and a former vice-president at General Motors Co.
Trump hosted a breakfast meeting early Tuesday with the heads of General Motors, Ford Motor Co. and Fiat Chrysler Automobiles. Prior to the meeting, Trump tweeted that he wants “new plants to be built here for cars sold here.” He has warned of a “substantial border tax” on companies that move manufacturing out of the country and promised tax advantages to those that produce domestically.
Automakers expressed optimism after the meeting.