President Trump and his supporters have clashed with the leaders who prevailed for years about the advantages of definitions. Now, the world will be able to know who is right, as the president’s sweeping fees play on cars and auto parts in an actual time experience on the global economy.
In Mr. Trump’s account, the customs tariff has a direct impact: it encourages companies to transfer factories to the United States, creating more American jobs and prosperity.
But for many economists, the impact of definitions is not a simple matter. They say customs duties are likely to encourage local cars in the long run. But they will also cause major side effects that can lead to counterproductive results on the president’s goals of jobs, manufacturing and economics as a whole.
This is because the customs tariff will raise the price of cars to consumers, discourage cars and slow the economy. Customs duties can also defend the supply chains and increase the costs of car makers that depend on imported parts, which reduces the production of American cars in the short term.
It can also lead to revenge on American car exports, as well as other products that American companies send abroad, which destroys global trade wars.
On Thursday, global stock markets decreased, as the shares of cars reached the effort, as investors absorbed the scope of Mr. Trump’s plans. The shares in General Motors, which imported many best -selling cars and trucks from Mexico, decreased by almost 7 percent in the middle of the day. Stelantis and Ford’s shares were less. European stocks closed less on Thursday, as automobile companies suffer from the worst losses.
When automobile and economists have defended to reformulate their growth expectations, America’s allies criticized Mr. Trump for imposing customs duties, saying that the fees will claim the stability of the global economy. Many revenge pledged.
Brad Sider, an economist in the Council of Foreign Relations, said the definitions are likely to lead to further production of local cars in the long run. He said that reaching there will be “really annoying” and costly to both American consumers and the US economy.
Mr. Ciser said that foreign auto companies are unlikely to give up the American market, and that brands such as Toyota, Hyundai and Mercedes may eventually end making more cars in the United States to avoid payment of customs duties. However, in the shorter round, high prices can convince some American consumers not to buy cars at all. He said that, in addition to the disturbances in the supply chains that pass through Canada and Mexico or depends on foreign parts, may cause low car production in the United States in the short term.
Almost half of all vehicles sold in the United States and 60 percent of all parts used in auto factories are imported. Daniel Royceka, an analyst at Bernstein, expected that car manufacturers companies may witness high costs by $ 6700 per vehicle.
“Because of turmoil along the way, you can have something similar to periodic shrinkage in the auto sector, with workers’ demobilization, with lost jobs, even in places that will attract new investments and grow over time,” said Mr. Ciser.
“This is a somewhat fraught step,” he added.
Economists also said that the approach is likely to have negative aspects not only for foreign auto companies such as Toyota and Mercedes, but also for American brands.
Jim Reed, a strategic expert to search for a research bank, noted that it was not only the shares of cars abroad that landed, but also for General Motors, which collects slightly more than half of its cars in the United States. “So the pain occurs locally and outside.”
“The more you listen to the current American administration, the more you appreciate that they are ready to sacrifice the market performance in the short term and economic growth if they are required to achieve their long -term goals,” said Mr. Reed.
Economists also questioned Mr. Trump’s assurances that the definitions will enhance economic growth, investment and employment, indicating that they can do the opposite.
On Thursday note, the Barclays Research Economists said they have reviewed their expectations and now expected global growth and the United States to slow down from 2024 levels. “But if the results of the worst cases are achieved on the definitions, these expectations may eventually end until they are very optimistic,” they wrote.
The uncertainty about the trend of commercial policy will encourage companies to stop making new investments in factories and employ more workers in the coming months.
“We expect companies to employ less in the next few months,” he said. “It is also possible that companies that temporarily stop investing the investment decision will stop the employment decision. So we see a lot of reduction in employment demand.”
Mr. Trump denied that the customs tariffs are a major negative impact, and instead indicates the company’s multiple ads about new investments in the United States. In addition to providing an additional tariff about imports from China, Canada and Mexico in the past few months, Mr. Trump plans to advertise More definitions Next week, which he said will make the global trading system more just.
Speaking at the White House on Thursday, the president said, “The work is returning to the United States so that they do not have to pay the definitions.”
“Many companies will be in good condition because they have already built their factory, but their factories are not exploited, so they will be able to expand them in an inexpensive manner quickly.” He added that “others will come to our country and build, and they are already looking for sites.”
Mark Dibllasido, American Politics Adviser, who served in the US Mall Office of the United States in Mr. Trump’s first state, said that the customs tariff will stimulate “a lot of investment in the American auto industry.”
He said: “As the White House explained, we are at a stage where 75 percent of the content of American vehicles abroad is manufactured and imported here.” “Re -equipping more of this industry and investing in industry and workers is a welcome step.”
He admitted that there could be “disturbances and perhaps a short -term price increase” in the meantime, but he said that similar protection in the past helped revive the auto industry.
But others say that car makers can wait for investments to see if the definitions will continue. Although Mr. Trump said on Thursday that they would be permanent and that the White House said that no exceptions would be granted, both states and foreign companies appear to be the hope that the president will decline.
“Although it was quite clear that he intends to do so, we know from the previous experience that we should not assume that these things are a deal that has been accomplished in order to be already,” said Jennifer McChyun, Capital Economics, said.
The anticipation of customs tariffs is already ripples through the auto industry. Kate Johnson, a customs broker in Safana, Georgia, who helps car manufacturers with their import, said that he was on the phone with customers throughout the morning on Thursday, and there was “a great stampede now to find out what to do.”
In the past few weeks, the tariffs have made it difficult for its clients to plan. He said: “Every advertisement appears, there are planning sessions, running different models to know the financial impact.” “It was something after another.”
Mr. Johnson said he believed the customs tariff “leads to reverse results. He said that many companies wanted to invest to manufacture more in the United States, but the definitions “will put financial pressure on them” while trying to do so. “It is a type of Catch-22.”
Valerie Benton Smith, a prominent sales colleague at Bill Black Chevrolet Cadillac in Greensoro, North Carolina, said that she was preparing for definitions, and that high prices and lack of car models in agents “may hurt greatly.”
She said that the customs tariff was suddenly presented, and that companies have not been prepared to meet customers’ demand using all cars and primary pieces. “I really think the best planning should be done,” she said. “There are many domino effects on this.”
Another main question is whether the definitions will get a greater trade war. Mr. Trump said on social media early Thursday that he will punish the European Union and Canada if they try to work together to respond to its definitions.
“If the European Union is working with Canada to cause economic harm in the United States of America, the customs tariff will be largely larger, much larger than it is currently, in order to protect the best friend of each of these two countries!” Mr. Trump wrote.
Foreign leaders angrily responded to the definitions, although none of them immediately imposed definitions in response.
Canadian Prime Minister Mark Carney said that his country will provide an additional retaliatory tariff for the United States, but will not be completed until Wednesday, when Mr. Trump plans to present the so -called mutual graphics.
“We will respond strongly,” said Mr. Carney. “Nothing is outside the table to protect our workers and our country.”
President Emmanuel Macron from France said on Thursday that he told Mr. Trump during a discussion the previous day that the customs tariff was “not a good idea”, and said that the Europeans would respond in the hope of making the American president reconsider.
“We will always protect Mexico.” She said that the Mexican government will issue an “indivisible response” to all US definitions – which so far includes steel and aluminum fees – which strikes the country on April 3.
Economists expected that the definitions could be particularly destroyed by Canada and Mexico, which was combined into the supply chain of cars in North America for decades.
Flavio Volb, President of the Canada Automotive Factors Association, called the customs tariff as a “really sharp tool”.
“A million cars are made in Canada annually by American manufacturers by 50 percent of American parts and 55 percent of American crude materials and he is ready to push them to a cliff to stimulate a point that no one understands,” said Mr. Volby, of Mr. Trump.
Reports previously contributed Daniel Kaifor Ian Austinfor Liz Aldurman and Emiliano Rodriguez Mega.
