NADA looks at the facts of Trump’s tariff plan

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Updated Jun 28, 2018

A lot has been written over the past several months regarding President Donald Trump’s new tariffs on steel and aluminum imports to the United States.

On Wednesday, the National Automobile Dealers Association (NADA) introduced some numbers to better showcase the impact these new tariffs could have on America’s transportation industry. The findings were quite interesting.

Though NADA says it believes the president is “rightly concerned with three major things” — the decline of U.S. manufacturing jobs, the trade deficit and unfair foreign trade practices — as reasons for implementing his new tariffs, the organization still believes “broad-based tariffs on autos and auto parts would result in serious unintended consequences. And ultimately, American customers would be left confused, with fewer choices, and paying higher prices.”

NADA says the average price of a new car sold in America is about $34,000. But, if assembled abroad and imported with the tariff added on to the wholesale cost, NADA says that car would have a “$6,000-plus price increase, putting it out of range for many American customers. Or, the importer could decide to no longer import it, reducing customer choice.”

As you know, that number would be exponentially higher — and equally problematic — if the same tactic is used in the commercial truck market. Do you think your customers could handle that?

Additionally, NADA says the tariffs could have the same impact on components and vehicle systems, meaning customers who are not currently in the market for a new vehicle could still be negatively impacted by the tariffs. There’s also the prospect of multiple tariff assessments on a single product, such as steel mined in Canada, shipped as a raw material to the United States for refinement, and then back to Canada as a finished component on a new car or truck.

The good news is NADA, as parent organization of the American Truck Dealers (ATD), is actively engaged on this issue. The association says: “We are scheduling meetings to educate officials in the administration on these realities in the automotive industry. We have urged Congress to exercise oversight on this process and to fully consider the potential economic impacts of any new tariffs. We will file comments with the Department of Commerce this week on the proposal, and will be testifying about the concerns of local dealerships and our customers.”

NADA is clear in stating it supports Trump’s decision to address unfair trade practices because those goals will “ultimately drive growth and be good for our customers.” But that broad support doesn’t mean the NADA is pleased with the President’s recent action. On the contrary. NADA is pushing back.

“Overbroad tariffs on autos and auto parts are not the right tools for accomplishing those goals,” NADA states. “They will raise prices on new cars and trucks and jeopardize affordability for millions of our customers. That will hurt the automotive industry far more than it will help.”

To read the entirety of NADA’s new report, please CLICK HERE.

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