Trump is pressuring U.S. automakers by threatening them with retaliation if they raise prices, despite imposing hefty 25 percent tariffs on the materials they need to manufacture vehicles.
According to reports, the president warned automakers at a recent event that he would disapprove of any price hikes following the tariffs, leading them to fear consequences if they pass on the increased costs. He also claimed that automakers should be grateful for his removal of Biden’s electric vehicle mandate and that the tariffs would ultimately benefit them. “Prices are going to go down, but specifically because companies will come into America,” Trump said to the CEOs.
This statement presents a contradiction, as the president is simultaneously claiming to reduce inflation and boost domestic manufacturing while making goods more expensive. The 25 percent tariffs on automobiles will take effect on April 2. Nearly half of all cars in the U.S. are produced overseas, with countries like Mexico and Japan being major manufacturers. Car companies are already stockpiling completed vehicles to counter the tariffs until May.
Matt Blunt, president of the American Automotive Policy Council, which represents major carmakers like General Motors, Stellantis, and Ford, stated that it’s hard to see how these tariffs won’t eventually lead to higher prices. It’s unclear how the Trump administration plans to penalize automakers if they are forced to raise prices due to the tariffs.
