How the president's tariff proposal could affect the U.S.
(WJBK) - It's a move that could shake up the entire auto industry, not just here in the United States but across the globe.
President Trump is proposing tough tariffs against overseas automakers. Depending on who you ask, it could accelerate the economy or put the brakes on affordable cars and trucks.
Ron Robertson of Blackwell Ford keeps a close eye on what manufacturers are doing. Although Ford is a domestic automaker, that doesn't mean he, along with dealers across the nation, aren't paying close attention to what President Trump is proposing.
The president's proposal would stick overseas automakers with up to a 25 percent tariff. He cites national security as the reason, but here in Detroit, the effect of is debatable. Economists are asking what about those very countries the big three automakers do business with?
"Remember that a lot of the production going on in Mexico and Canada is by U.S. companies," Wayne State University Associate Professor Dr. John Taylor said.
Taylor says we have seen quotas on autos in years past dating back to the 1970's but not tariffs like these. This would cause the price of let's say a certain BMW or Honda to shoot up. But that may also drive up the price tag on domestic vehicles as well.
"Once you cause the price of competing products that are imported to go up through a tariff, (U.S. automakers) going to raise their prices. They're not going to leave money on the table," Taylor said.
The folks at Blackwell Ford agree.
"It would depend what Ford did with the pricing of the vehicles as compared to foreign manufacturer. I'm sure they would do their best to make sure we were competitive," Robertson said.
"If you disrupt the efficiency of the U.S. auto industry and the companies and disrupt their supply chains, it will harm those companies profits long term," Taylor said.
The UAW has a different take. On Thursday, leadership praised the tariffs, saying American workers have been handed the short end of the deal for years. Dennis Williams, president of the UAW, said he's welcoming this discussion.
Still though here are questions of how serious Trump is about this tariff talk.
"The president is very good at this, negotiating leverage. So you put something like this on the table and maybe you give a little bit of this up to get a little something else," Taylor said.