Media Contact
Adam Allington
The announcement of a 25% tariff on imported cars and parts rippled through the auto industry on Thursday. The move has sparked criticism from foreign governments and put downward pressure on automakers stock.
Arthur Wheaton
Director of Labor Studies, ILR School
Art Wheaton is an expert on transportation industries and serves as director of labor studies at Cornell’s School of Industrial and Labor Relations (ILR). He anticipates the immediate impact of the tariffs as, “chaos, price increases and falling sales in the near term.”
Wheaton says:
“The 25% tariff on autos and parts will create immediate price increases and wreak havoc on supply chains. The U.S. imports about half of the autos we sell and a significant chunk of the parts.
“Imposing a 25% tariff, with some exclusions for USMCA compliant parts, could raise vehicle prices as much as $10,000-$20,000. If the end goal is to increase production of parts and assembly in the United States, then the tariffs would likely need to be consistent for decades to allow planning for the shifting supply chain.
“This was achieved for trucks by the ‘chicken tax’ on trucks for the last 50 years allowing GM, Ford and Stellantis outsized market share on pickup truck sales for decades.”
