US President Donald Trump announced on that he may soon raise auto tariffs, aiming to encourage automakers to accelerate their investments in the US, reported Reuters.
This move comes amid ongoing discussions between automakers and the White House regarding the 25% tariffs previously imposed on autos by Trump.
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Trump said at a White House event: “I might go up with that tariff in the not too distant future. The higher you go, the more likely it is they build a plant here.”
The Detroit Three automakers have expressed concerns over a recent deal that reduces tariffs on British car imports while maintaining them for Canadian and Mexican production.
Trump highlighted recent investment commitments, such as General Motors’ plan to invest $4bn in three US plants and relocate some SUV production from Mexico.
In March, Hyundai announced a $21bn investment, which includes a new US steel plant.
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By GlobalDataMexico stated last month that cars assembled in Mexico and exported to the US will face an average tariff of 15%, rather than 25%, due to reductions for the value of US content.
Trump said: “They wouldn’t have invested 10 cents if we didn’t have tariffs, including for manufacturing American steel, which is doing great.”
Automakers are grappling with rising cost pressures due to tariffs.
Ford Motor and Subaru of America have recently increased prices on certain models to offset higher costs.
In May, Ford projected that tariffs would impact its adjusted earnings by approximately $1.5bn.
General Motors reported last month that its current tariff exposure ranges from $4bn to $5bn, including around $2bn on affordable vehicles imported from South Korea, where entry-level Chevrolet and Buick models are produced.
