Automakers brace for higher costs as steel and aluminum tariffs kick in

Old_Joe

This report is being placed in "Other Investing" because the situation described has potentially serious impact on aspects of the American economy.

Following are excerpts from a current NPR report:

Automakers are still dealing with whiplash from the delay, imposition and then partial rollback of tariffs on Canada and Mexico. And starting today, they also face higher tariffs on steel and aluminum — raw materials that the auto industry consumes in vast quantities.

President Trump imposed tariffs on the two metals during his first administration. But now he's expanding them. This time, the 25% tariff on steel applies without exceptions for any countries or industries that rely on the metal, and the tariff on aluminum is rising from 10% to 25%. Trump said in a proclamation that the tariffs are justified on national security grounds, although he has also said in remarks they will promote U.S. jobs and make U.S. companies more profitable.

The expanded tariffs on steel and aluminum "place U.S. manufacturers at a tremendous disadvantage—including those who do not import these raw materials," the Coalition of American Metal Manufacturers and Users said in a statement. The coalition represents suppliers that use metals as an input, making wires, tools, machines and parts for cars, construction, consumer goods, electronics and other industries. "The reality is that the U.S. does not produce enough steel or aluminum to meet domestic demand, and new production facilities cannot be built instantly."

Ford CEO Jim Farley told investors last week that even though Ford gets most of its metal from within the U.S., it will still feel the effects of the tariffs. "Our suppliers have international sources for aluminum and steel. So that price will come through," he said. "We'll have to deal with it."

Meanwhile, Trump's tariffs on Canada and Mexico are in place, but have been suspended until early April for most — but not all — cars and car parts. If those tariffs are reimposed for a significant period of time, it could further drive automaking costs up further — even in the U.S. That's because the North American supply chain is highly integrated, and auto parts may cross the U.S. border several times.

a2z

for the stupid, rhyming is too complex and history fully repeats.
last time this became an Econ101 case study, showing how metal tariffs cost multiples in domestic mfg auto sales, not to mention exports.

JD_co

Its to the point where you realize he is actively trying to bankrupt this country. It's what he is really good at.


"Ford CEO Jim Farley told investors 'We'll have to deal with it'."

Meaning Ford will have to raise prices and pass the additional expense onto the consumer.

Anna

deleted. I failed, once again, to notice the thread was not in off topic. Sorry.