Tariff Impacts Auto Industry

Import duties subtracted $800 million from Ford’s profit in the second quarter, leading to a slight loss for the period. For the whole year, Ford estimated that tariffs would cost the company $2 billion.

General Motors, the largest U.S. carmaker, said last month that tariffs would cost the company as much as $5 billion for the full year, although it hoped to offset about a third of that amount by cutting costs and moving some manufacturing to the United States. Still, the company expects retail prices to rise 1 percent or less this year, Paul Jacobson, the chief financial officer of G.M., told investors last month.

Toyota, which makes many cars in the United States but also imports them from Japan, Mexico and Canada, said on Thursday that tariffs would cost it $9.5 billion. A day earlier, Honda pegged its tariff cost at $3 billion.

No one has adequately explained why the tariff tax policy is even minimally beneficial or necessary in replacing the proven track record of free trade of the last 75 years. 

Anyway, import taxes are causing billions of dollars of losses.  According to Cox Automotive, as of mid-July carmakers had 82 days of supply in the United States, roughly enough to last until the beginning of October. That gives you a rough idea of how long they can avoid raising prices. 

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