“Trump’s new tariffs on auto parts will raise car prices – NYTThe Trump administration has imposed a 25% tariff on imported auto parts, which will lead to higher car prices, repairs and
insurance premiums. Volvo, Rivian and GM will be the most affected.”, — write: unn.ua
Details According to the publication, the administration of US President Donald Trump introduced an additional 25% duty, which came into effect at midnight on May 3, on the import of key automotive components, including engines and transmissions.
“This second round of duties will have a broader impact, as even cars manufactured in the US often have engines, transmissions, batteries and other components manufactured in other countries. Duties on spare parts will not apply to components from Canada and Mexico if these goods meet the requirements of the North American Trade Agreement concluded during Trump’s first term. Among other things, this agreement requires that a minimum percentage of auto parts content originate from North America,” the publication writes.
The publication notes that Trump’s tariffs have already led to an increase in prices for new cars, against the background of customers rushing to dealerships to purchase vehicles before the tariffs take effect. The duties have a ripple effect on the used car market, as more and more people are looking for affordable alternatives to new cars, increasing demand and prices.
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“The duties on new auto parts are also expected to lead to an increase in repair costs and insurance premiums, as spare parts will become more expensive. Rising car prices will contribute to overall inflation, which Trump has promised to reduce,” the publication notes.
Trump insists that the tariffs will bring production back to the US. But even if this policy is successful, consumers in the country will still pay more for cars, the publication writes. Many goods, including many auto parts, can often be produced much cheaper in China, Mexico, or other countries outside the US.
General Motors said that due to the duties, it is canceling the third shift on the truck production line in Oshawa. The company noted that this plant will now produce more trucks for Canadians.
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Analysts also noted that the company will be more affected because imported parts often account for more than half the value of a Chevrolet or Cadillac manufactured in the United States.
Analysts also report that Volvo Cars, which has a plant in South Carolina but uses many parts from China, will be affected.
“Even companies that manufacture cars in the US will feel the pain. Rivian produces electric pickups in Illinois, but imports batteries from South Korea and China, which will be subject to duties. The duties are expected to reduce the supply of cheaper cars. According to Cox Automotive, almost 80 percent of cars priced under $30,000 will be subject to 25 percent duties, including popular cars like the Honda Civic, Toyota Corolla and Chevrolet Trax,” the publication adds.
Let us remindDonald Trump announced the introduction of a 25% duty on all imported cars to the United States from April 2. The decision caused concern in the EU, which is assessing the consequences.