Trump's Auto Tariffs Could Crush Demand, Blow $26 Billion Hole In Industry Profits

The 25% tariff on imported cars and parts could wipe out up to 3 million vehicle sales, slash automaker profits in half and throw the U.S. auto supply chain into chaos as manufacturers scramble to reconfigure operations in a high-stakes race against time, according to Bank of America.

In a note shared Wednesday, research analyst John P. Babcock said President Donald Trump’s new trade action announced on March 26 would trigger significant demand destruction, higher consumer prices, and a severe blow to profitability, especially if additional parts tariffs are confirmed in May.

How Bad Could It Get For US Auto Sales?

The proposed tariffs—taking effect April 3—apply to all imported cars, light trucks and several critical components, including engines, transmissions, and electrical systems. According to Babcock, the industry response will be higher vehicle prices across the board.

If manufacturers pass along the full 25% tariff to consumers, BofA estimates a sales loss of 3.2 million units at the current trend rate of 16 million vehicles annually, a 20% ...

https://www.benzinga.com/25/04/44610548/trumps-auto-tariffs-could-crush-demand-blow-26-billion-hole-in-industry-profits