In a move President Donald Trump says is meant to fulfill a campaign promise and increase American jobs, foreign steel and aluminum producers will soon face hefty new tariffs but some fear the move could quickly backfire and hurt precisely those who supported candidate Trump, especially workers in the U.S. auto industry.
With exceptions temporarily carved out for Canada and Mexico, steel imports will now face 25 percent tariffs, while aluminum will be subject to new 10 percent duties.
Earlier in the week, Commerce Secretary Wilbur Ross tried to downplay the impact. But, considering the amount of steel and aluminum in a typical vehicle, prices for cars could go up by hundreds of dollars, analysts warn.
“This could backfire tremendously,” warned automotive analyst David Sullivan of AutoPacific, especially at a time when the auto industry is already showing signs of weakening sales that could result in lower profits and more job cuts.
Sullivan called the president’s tariffs plan “a very tone deaf move that could negatively impact a lot of workers,” many of which voted for Trump in 2016 in critical swing states like Michigan and Pennsylvania, as well as more solid Republican states such as South Carolina and Alabama that have become major automotive manufacturing centers.
The exact impact of the new tariffs on the auto industry is unclear, in part because there are so many different sources of parts and components that go into the typical vehicle.
Manufacturers and their suppliers are trying to figure the precise cost, said Joe Phillippi, head of AutoTrends Consulting, but he estimates it will be $200 to $300 a car. Some have put the figure significantly higher, and the number could vary widely by manufacturer.