Page 14 - GIADA-April2017

FEATURE

Dealers and Manufacturers Are Wary:

Will Trump Impose Tariff?

Proposed tariff—possibly up to 20%—has huge implications for new-vehicle

pricing

BY BRETT STEVENSON, DEALER MARKETING

With his campaign promise to put a stiff An increase in costs, either from a tariff facturer’s vehicles are being made.
tariff on vehicles manufactured outside or greater workforce expenses, will trans-
of the United States, President Donald late to significant vehicle price hikes. This The same international nature exists for
Trump has automakers scrambling and is bad news for the industry because most commercial airplane manufacturers. The
dealers worried. dealers are already struggling with hav- graphic on this page identifies the coun-
ing to make seven-year loans just to work tries that supply parts used to build the
The proposed tariff, generally mentioned with consumers’ payment requirements. Boeing 787 Dreamliner. Although the
to be 20%, throws a wrench in auto pric- planes are manufactured in the U.S.,
ing. If domestic manufacturers move pro- Foreign brands have pointed out the in- many of their parts are not.
duction back to the U.S., they will con- ternational nature of even their U.S.-built
tend with higher worker costs and lose cars for many years. You can find a post- It will be interesting to see how the Trump
the investments already made in other er somewhere in most Honda, Toyota, or administration will deal with its promise
countries. Mazda dealerships that indicates where to place a tariff on vehicles made outside
outside of the U.S. parts for that manu-
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12 | GIADA Independent Auto Dealer APRIL 2017