Washington is mulling over a new import tax which could affect both vehicles imported in the United States as well as foreign made auto parts used in domestically produced cars.
The price increase comes at an inopportune time. Nick Bunkly’s article for Automotive News quotes Cody Lusk, president of the American International stating,”We already have an affordability issue with the auto industry, we’re already pushing it with consumers, with the average payment going up and loan terms being stretched out.”
The import tax is forecasted to hit foreign manufacturers the hardest although many American producers will also suffer price hikes although to a lesser degree due to the use of foreign made vehicles. So what exactly does that mean? Automotive News built the table below using the data from a Baum and Associates study.
Source: Baum & Associates, constructed by Automotive News
If implemented the tax is sure to have automakers looking to produce as much as they can domestically even to the point of relocating production facilities from Canada and Mexico back to the United States.
All of the above facts and figures assumes that the import tax is actually implemented. Ryan Beene and John Lippert quoted UBS Securities analyst as forecasting the chances of a border tax being enacted at less than 50 percent. The tax has a good chance of making its way through the House of Representatives but is “very unlikely” to pass in the Senate, Langan said.
So perhaps the worry about the price increases is a bit premature, but if we’ve learned anything from this last election cycle it is to expect the unexpected.
But why wait for possible price increases? Head to PushAuto and get offers on the new car of your dreams as soon as today!