Automakers in Detroit and across the globe are waiting to see if President Trump follows through on a threat to impose as much as 25 percent tariffs on vehicles and auto parts imported into the U.S.
The U.S. Commerce Department delivered a confidential report to Trump this week on whether he could justify the tariffs on the basis of national security.
The Ann Arbor-based Center for Automotive Research predicts such a tariff could cause a significant increase in vehicle prices, even if it was only used as a bargaining chip in trade negotiations.
The Center’s Kristin Dziczek says the extra tax could also force automakers to limit multi-million dollar investments in new manufacturing plants.
“And the fact that (the tariff) may go away as soon as whatever negotiating aim is met at the table doesn’t lead them to the level of certainty they need to make those kinds of big bets,” Dziczek said.
Automakers en masse U-S oppose the tariffs, arguing they are unnecessary and that the industry is already dealing with cost increases caused by tariffs on steel and aluminum.