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Trump’s Tariff Plan Threatens Wreckage for the Auto Industry, Analysts Say

Posted January 26, 2017

Under Economic Issues, International Trade Issues

(Matt Kwong – CBC News)

U.S. President Donald Trump’s meeting with Detroit’s automakers on Tuesday contained a promise to turn the ignition switch and fire up American jobs. But analysts say that shiny new protectionist policy could be a lemon.

Trump’s threat to wall off the import of Mexican-made cars with a 35 per cent tariff “would be a disaster” for the U.S. auto industry, says Marina Whitman, a former vice-president of General Motors. She warns of a less competitive automotive and supplier industry, a decline in market share compared with manufacturers in other countries, a “severely interrupted” supply chain and pricier cars.

The president’s proposal “simply doesn’t promote job growth,” says Whitman, who teaches at the University of Michigan’s Ross School of Business. “If Trump indeed pushes this protectionism — if he sets up significant tariffs on imports from Mexico and also from Canada — that would be quite devastating to the U.S. auto industry.” Click here to read more.

Related: Trump Endorses Plan for 20% Tax on All Mexican Imports (New York Times)