How Will Trump's Auto Tariffs Affect You?

Donald Trump

Whether or not you follow the news, there's been one thing that has been impossible to miss in the world. President Donald Trump and his international diplomacy. One of the latest things to come up in Trump's policies is his stance on car imports into America.

To summarize, Donald Trump is considering imposing duties of 25% on automotive imports. Trump believes that the world has been "taking advantage of the United States" when it comes to trade deals, and he wants the world to know it's stopping now.

What Does This Mean?

In 2017, Canada exported $58-billion worth of automobiles to the United States. It's a massive industry within Canada, accounting for about 130,000 jobs across the country. Even indirectly, the industry supports about 500,000 jobs within Canada. Just based on the numbers there, Canada would be paying $14.5-billion in duties. That's a huge fee to pay to export goods, and I can't imagine Canada would continue exporting so many vehicles to the US when there is such a steep fee to do it.

How Does This Affect Me As A Citizen?

Because Canada would slow down the exports to the US, the income amount goes down. When income levels go down, jobs go down. When you're negatively affecting half-a-million people in a country of 36-million, that's going to have repercussions on the entire's country economic system. This could mean higher taxes, higher fees on government properties and increased prices on just about everything.

But How Does This Affect Me As A Car Buyer?

As these duties directly affect the automotive industry, they will affect the automotive prices even more. Not even considering the hundreds of thousands of jobs lost across North America, this could absolutely affect prices and even models being manufactured. Fees on cars would go up, and some of those raises will be reflected in the prices that consumers pay for a car. There could even be models that are discontinued due to manufacturing fees being too high for the OEM to support.

Also think about how this affects the smaller auto shops and repair centres. If the costs of the parts that shops order in go up, they may not be able to afford to stay in business, or give such great discounts on parts and labour. Again, this will be reflected in the price of any repairs or other parts you need for your vehicle.

Should I Buy A Car Now?

If you're considering purchasing a car sometime within the next 6 months, this news might make you panic a bit. While everything involving these tariffs is speculative, you'll want to be careful not to do anything impulsively. While it is possible that these tariffs will be implemented, nothing is guaranteed. If these tariffs are put into play, it's probable that prices of everything WILL go up. Whether or not you want to buy now and avoid the potential increases, that will depend on how much faith you have in Donald Trump.

Categories: Finance, Tips

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