TL;DR
Trump’s 25% tariff threat on imported cars, a play to his base, will likely backfire, increasing car prices for everyone while destabilizing the auto industry and global markets.
Story
Trump’s 25% tariff threat on all foreign cars is a trade war grenade lobbed straight at the consumer’s wallet. He claims it will bring manufacturing back to the US, but history whispers a different story. Remember the Smoot-Hawley Act?
‣ Smoot-Hawley Tariff Act: This 1930 law dramatically raised tariffs on thousands of imported goods into the United States. Many economists and historians blame it for worsening the Great Depression.
That ‘protectionist’ policy deepened the Depression’s global chokehold. This car tariff echoes that disaster. It ignores the interwoven nature of modern supply chains—many “foreign” cars use American-made parts. This tariff will jack up the price of all vehicles, regardless of origin.
Trump touts this as a win for American workers, but the reality is far messier. Ford, GM, and others manufacture extensively in Mexico and Canada—those jobs and profits now face a wrecking ball. Will these companies rush to build new US factories? Doubtful. The initial investment is massive, and the political winds shift too fast. Trump’s protectionism is a house of cards waiting for the slightest breeze.
Ford, GM, and others manufacture extensively in Mexico and Canada—those jobs and profits now face a wrecking ball. The stock market will likely tumble, as investors hate uncertainty. And consumers? They get to foot the bill for pricier cars, fewer jobs, and a volatile economy. Like lambs led to slaughter…
This tariff is a short-sighted stunt, a ploy to play to his base while throwing the global market into chaos. Remember: when politicians promise prosperity through tariffs, it’s time to check your wallet.
Advice
Diversify your investments beyond the auto industry—tariffs are like economic earthquakes, and aftershocks are guaranteed.