- President Donald Trump shrugged off concerns that his auto tariffs will cause carmakers to raise prices, saying he couldn’t care less if they do. In an interview with NBC News, he added that, “I hope they raise their prices, because if they do, people are gonna buy American-made cars.” But even cars assembled in the US have foreign-made parts.
President Donald Trump said his new auto tariffs are permanent and shrugged off concerns that they will cause carmakers to raise prices.
In an interview with NBC News on Saturday, he was asked about a recent Wall Street Journal report that said he warned auto CEOs not to hike prices while discussing tariffs with them.
“No, I never said that. I couldn’t care less if they raise prices, because people are going to start buying American-made cars,” Trump replied.
He added, “I couldn’t care less. I hope they raise their prices, because if they do, people are gonna buy American-made cars. We have plenty.”
Trump later said if prices on foreign cars go up, then consumers will buy American cars.
He also confirmed the tariffs are here to stay, saying, “Absolutely, they’re permanent, sure. The world has been ripping off the United States for the last 40 years and more. And all we’re doing is being fair, and frankly, I’m being very generous.”
Foreign-made auto parts would also be hit with a 25% tariff, but vehicles and parts imported under the US-Mexico-Canada Agreement trade deal will not see duties until the government establishes a process for imposing them, the White House has said.
While more than half the value of imported auto parts came from Mexico and Canada last year, over $70 billion came from areas not covered by the USMCA pact, including Asia and Europe, according to data from the International Trade Association cited by the Associated Press.
US and foreign automakers have closely integrated supply chains that span North America. During the manufacturing process, cars and parts can cross between the US, Mexico and Canada multiple times.
Even Trump ally Elon Musk has warned that Tesla, which manufactures all of its cars sold in the US domestically, will be affected by the auto tariffs.
Wedbush Securities analyst Dan Ives has estimated that car prices could go up by $5,000 to $10,000 because of the auto tariffs, depending on whether a vehicle is a mass-market or premium brand.
“Every automaker in the world will have to raise prices in some form selling into the U.S., and the supply-chain logistics of this tariff announcement heard around the world is hard to even put our arms around at this moment,” he wrote in a research note on Friday.
While the White House has said tariffs are meant to revitalize the US industrial base, Ives is skeptical that car manufacturing can be completely reshored.
That’s because even cars built in America come equipped with foreign-made parts and components that constitute 40% to 50% of their value.
“A U.S. car with all U.S. parts made in the U.S. is a fictional tale not even possible today,” he added.
This story was originally featured on Fortune.com
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