Since Donald Trump began his trade war against U.S. allies, the repercussions have been swift and severe. Harley-Davidson, the iconic American motorcycle brand, said it would be outsourcing production to foreign plants to absorb the impact of new EU tariffs.
That spelled impending doom for some of Harley’s employees, and other companies have begun feeling the effects as well.
However, not every automotive company will pack up its U.S. operations and move away.
Toyota said it would simply raise the price on the Camry midsize sedan, which remains America’s best-selling car. Meanwhile, the automaker said Trump’s threatened tariffs “would increase the cost of every vehicle sold in the country.”
Adding $1,800 to every Camry sale
Prior to commenting on Trump’s proposal in writing to the Commerce Department, Toyota officials described its domestic operation as “an exemplar of the manufacturing might of America,” Automotive News reported.
The automaker said tariffs would be “just a tax on consumers.” In the case of Toyota Camry, the tax would amount to $1,800 per vehicle.
Obviously, if sales declined as a result, Toyota may very well decide to trim workforce at Camry’s production site in Lexington, Kentucky. Jeep was facing similar problems when deciding how to manage tariffs on some of its own popular models.
The fate of the Jeep Renegade crossover
After Fiat took over the old Chrysler Group brands, the company began building and importing the Jeep Renegade subcompact crossover ($18,445) from Italy. As threats of tariffs loomed, analysts told Automotive News it would mean bad things for this model.
For starters, Renegade would cease making financial sense for the company. So the 104,000 Americans who bought one might have to find a different vehicle to drive.
Theoretically, a Jeep dealer could steer shoppers toward a U.S.-built model. However, the Compass ($21,095) and Cherokee ($23,995) are significantly more expensive.
Another option for Jeep would simply be to raise the price of Renegade.
One of America’s best-selling SUVs, too
Through the first five months of 2018, Toyota RAV4 actually outsold Camry and sat at No. 4 on the U.S. market. It has gained 7% over the same period the previous year. It’s now one of the most popular vehicles Americans drive.
However, it’s built in Ontario and imported according to NAFTA guidelines. Depending on how the Trump administration decides to proceed, there are many instances in which RAV4’s price would rise by several thousand dollars, too.
195,000 U.S. jobs hanging in the balance
On June 27, Global Automakers, a lobby that represents foreign car companies, spoke about the risks of impending tariffs. If the Trump administration decided on 25% taxes, it would lead to the loss of 195,000 U.S. jobs, a spokesman said.
If other companies responded with tariffs on U.S. models, that number could reach as high as 600,000 jobs. (Harley-Davidson’s reaction to EU tariffs serve as a blueprint here.)
Over 1.3 million work in the automotive field, which produced 11 million cars in America in 2017. That was double the numbers from 2009.