Trump’s tariffs could prove as harmful to the US auto market as Lehman’s collapse and community outbreak, warning S&P forecasters
- S&P Global Mobility cuts 700,000 cars From President Donald Trump’s annual sales estimates as a result of tariffs on imported vehicles. This is “one of the biggest changes in the month,” and has led to predictions so far.
The tariffs on President Trump, which affected earlier this month, have proven almost destructive to the US automotive industry as the global coronavirus pandemic and the bankruptcy of the Lehman brothers.
On Monday, Automotive Industry Forecast S&P Global Mobility cut 700,000 cars and mild trucks from this year’s US sales estimate. Previously, we expected 16.2 million lightweight vehicles to be sold in 2025.
“Combined with a universal 10% tariff, the impact of Trump’s car rates led to one of the biggest monthly changes he’s made to forecast,” writes Stephanie Brinley. Research Notes. “It only reacted to the 2020 Covid Global Manufacturing suspension, and the global financial crisis of 2008-09 was greater than changes in sales and production forecasts.”
At the end of last year, S&P Global Mobility should not be confused with S&P Global’s brother credit rating agency –It was predicted Only mild growth in US auto sales across nearly 16 million vehicles last year was the result of continuing sticker prices and uneasy consumers.
The impact of tariffs, including a 700,000 unit cut to US sales, should reduce overall lightweight vehicle sales totaling 1.3 million units worldwide. Previously, S&P Global Mobility was estimated 89.6 million vehicle.
Trump’s tariffs came into effect on April 3, imposing a 25% obligation on all imported vehicles. This comes on miscellaneous tariffs, including “mutual” tariffs, which differ from “mutual” tariffs when implemented by the country’s trade balance with the US, including current “mutual” tariffs
As a result, Number of car manufacturers We have already suspended shipping of new vehicles to the US. Volkswagenits premium sister brand Audi and Mitsubishi motor.
Even Jaguar Land Rover, a company that relies heavily on the US market, has halted exports. A third of the total volume of British car manufacturers is sold in North America.
“The impact of tariffs could have a major short-term impact on global sales and production, and the US and North America feel the worst,” continued Brinley.
Trump is currently considering whether to expand the bailout to the automotive industry
Monday, Trump Proposed He was currently considering ways to support automakers, but the situation remains so fluid that these latest statements could not be considered in Brinley’s analysis.
It is not clear how the administration’s tariff regime will change in the future. Trump has already flip-floped several times, including the original one-month extension granted to the carmaker in February.
But Commerce Secretary Howard Lutnick said in ABC’s “this week” Sunday news programme that it wasn’t a so-called “mutual” cousin and that sector tariffs were not intended to extract concessions through negotiated transactions.
Instead, they are fundamentally strategic in nature. This means they are designed to promote restock production in key industries rather than simply serving as revenue drivers to offset the generous tax credits Trump has planned.expansionHis signature of 2017 tax cuts.
“Only about half of the vehicles sold in the US are manufactured domestically, a decline that puts domestic industrial bases and national security at risk,” the White House said.
This story was originally introduced Fortune.com