US tariffs threat a headache for foreign automakers

NEW YORK: US President Donald Trump’s renewed threat to impose tariffs on auto imports will hit foreign automakers that export a large number of vehicles to the US market, but many also manufacture cars domestically.

After yanking his endorsement of a joint statement at the G7 summit in Canada, Trump tweeted that his administration taking a “look at Tariffs on automobiles flooding the US market”.

Most of these brands, such as Mercedes and BMW as well as Nissan, Honda and Volkswagen, have at least one auto plant on US soil, where they employ tens of thousands of workers.

These automakers have invested billions of dollars in their US facilities.

Toyota and Mazda announced at the start of the year plans to build a US$ 1.6 billion joint facility in Alabama that will be capable of producing 300,000 vehicles a year.

Volvo Cars, which plans to open a plant in South Carolina by the end of the year, has warned that new import duties would affect its investment plans.

In 2017, about 17.2 million vehicles were sold in the US, according to AutoData, which compiles figures from manufacturers and dealers.

Nearly 8.7 million of these were imports, according to the Center for Automotive Research, mostly from Mexico and Canada – partners in the North American Free Trade Agreement – as well as from Japan, Germany and South Korea. — AFP