NEWSLETTER
President Donald Trump has taken executive measures to impose tariffs on imports from Canada, China and Mexico. Jessica Caldwell, director of Ideas in Edmundsunited Testreet Discuss how these rates can affect the automotive industry.
Related: where you will feel the financial impact of Trump's rates
Complete video transcription below:
Conway Gittens: Now, you mentioned that while sales can slowly can vehicles here in the United States, they are strong in Europe and Asia. Then, given that global trend towards EVs, how could what happens here in the United States as an impact? You know, our position against foreign competitors.
Jessica Caldwell: Yes, I mean, I think it is a really important point because we think of foreign competitors, particularly Chinese car manufacturers, who have never challenged significantly significantly in the United States for this market, despite rumors for decades. But automobile manufacturers, particularly here in Detroit, is as if they really could not take the accelerator's foot because they will finally pass from their global competition. And that is a really scary thought because, you know, companies like General Motors and Ford, have been trying to stay at the tip of this, you know, this wave of electrification. Because in the past, they have definitely been accused and guilty of being behind the trend.
And that almost, you know, as we saw in 2008, it led to some serious ramifications for those companies. So I think it is a challenge when its local market, maybe it seems a bit difficult to gain impulse, but you look around the world and that is not necessarily the case. And how will you be able to compete with the manufacturers of Chinese cars that go so strongly, you know, your market but also looking to export more and that is, you know, it will be a difficult task for Detroit car manufacturers like us? Look at the next 10 to 20 years.
Conway Gittens: And so he keeps this, this issue of competition, I wonder if we see this decline in the infrastructure and possibly this decline in this federal tax. And then you get on that the situation of the rate. How does that affect all this supply and demand or do it at all, since many foreign cars manufacturers already assemble their cars here in the United States?
Jessica Caldwell: Definitely, I think it becomes a bit complicated just because how far the tariffs arrive if they begin to go to pieces. I mean, that is a different story than if it is a final assembly of where the vehicle is manufactured. If that is the case, then perhaps the risks are not so bad because, as he pointed out, many of the manufacturers of foreign cars have already gathered vehicles here. But I think that what is probably more discouraging is the idea that all the parts that arrive, you know, different parts of the world, Mexico, Taiwan, Asia, all those will be rates because that, I mean, is not only that. Logistics nightmare because you are talking about so many parts from so many different places, and many times parts are made in different parts of the world.
So how does all that together work? So, from the point of view of the administration, that is extremely difficult. But then he also added costs. If you have the elimination of a federal tax credit, you are also paying tariffs in all these additional parties. There is only so much that the consumer can absorb at this time, and especially again with the cost of living that increases so much in recent years, interest rates remain high despite the fact that they are decreasing, but they '' is still very high of Historical standards, it really is a situation in which it is difficult for consumers to support this new technology, despite the fact that if all the pieces are taxed, then all vehicle prices will increase, so that can really change things.
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- Trump EV's policy will have unexpected consequences beyond cars
