Most new car prices may rise ‘dramatically’

AutoNation CEO decries tariff tiff

Auto prices in the United States will rise “dramatically” if the Trump administration imposes tariffs, AutoNation Chairman and CEO Mike Jackson told CNBC’s “Squawk Box” on Wednesday.

“Automotive tariffs will make steel tariffs look like a company picnic. … This will unleash a real trade war. The numbers are so much bigger. It will raise prices dramatically for consumers in the United States. It will be inflationary,” said Jackson, who also chairs the Federal Reserve Board of Atlanta.

Jackson’s comments followed an automotive trade group saying it will tell the Trump administration that a U.S. threat to impose a tariff of up to 25 percent on imported passenger vehicles would cost American consumers $45 billion annually, or $5,800 per vehicle.

Jackson, who leads the nation’s largest auto retailer, based in Fort Lauderdale, said he thought the Trump administration would have embraced Europe’s recent offer to go tariff-free. He said on CNBC that BMW produces more vehicles in the United States at its plant in South Carolina than it sells, exporting primarily to China.

“BMW’s bold step to manufacture very complex vehicles in the Southeast led to Mercedes-Benz and Volkswagen building plants in Tennessee. The Germans should be congratulated for their investment in the United States. So it’s a bit of a head-scratcher to threaten BMW with tariffs,” Jackson told CNBC.

“The Europeans are already doing what you want. You want to punish them for doing what you want?” he said.

Colin Brown, chairman and CEO of Deerfield Beach-based JM Family