Reuters has reported that the US Department of Commerce (DOC) has sent a report on its Section 232 investigation on auto imports to US President Donald Trump. Although the details of the report have not been disclosed, the industry is anticipating that the recommendations in the report include broad tariffs of up to 20 percent to 25 percent on assembled cars and parts, or narrower tariffs targeting components and technologies related to new energy cars, autonomous, internet-connected and shared vehicles, according to Reuters.
The Motor and Equipment Manufacturers Association (MEMA) has called for the immediate and full release of the report. “It is critical that our industry have the opportunity to review the recommendations and advise the White House on how the proposed tariffs, if they are recommended, will put jobs at risk, impact consumers, and trigger a reduction in US investments that could set us back decades. Secrecy around the report only increases the uncertainty and concern across the industry created by the threat of tariffs,” the statement said.
The Center for Automotive Research (CAR) estimates that the cumulative effect of current and potential US trade actions on automobiles and auto parts could cause new car prices to rise by $2,750 on average. CAR estimates that the price of even US-built vehicles could increase by as much as $1,900 due to the current share of imported parts content. According to CAR, used vehicle prices will also rise due to heightened demand and constricted supply, and higher automotive parts prices will drive up the price of vehicle maintenance and repair, so even holding on to an existing vehicle will become more expensive.