U.S. President Donald Trump's 25% tariff on auto imports may cost American consumers more than $30 billion in higher vehicle prices and reduced car sales in the first full year, consultancy firm Anderson Economic Group said in a report on Thursday.
WHY IT'S IMPORTANT
Manufacturers are expected to bear some of the tariff costs in the first year, but will eventually alter production and possibly cease import of certain low-volume models into the U.S. market.
AEG expects manufacturers to reduce the number of models sold in the U.S., shift some production to the country and pass almost all costs related to tariff on to consumers.
CONTEXT
Trump unveiled a 25% tariff on imported cars and light trucks last month.
The tariff covers more than $460 billion worth of imports of vehicles and auto parts imports annually, according to a Reuters analysis.
KEY QUOTE
"If you are in the market for a new car and you find one you like, my advice is to buy it right away," said AEG CEO Patrick Anderson.
"If you have a used car you rely upon, my advice is to make sure it is well maintained as you are likely to use it for a while longer than you had earlier planned."
BY THE NUMBERS
For models made or assembled in the U.S., AEG estimated tariffs could cost an additional $2,500 to $5,000 for budget cars, $5,000 to $8,000 for mid-sized vehicles, and between $10,000 to $15,000 for SUVs and luxury models.
Cars imported from Europe and Asia may have a potential tariff impact of $8,000 to $10,000 for smaller models and up to $20,000 and beyond for luxury, SUV and sports models, the consultancy firm estimated.
