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Economist discusses potential impact of Trump's proposed tariffs on auto industry

Economist discusses potential impact of Trump's proposed tariffs on auto industry
1 day 6 hours 4 minutes ago Monday, December 02 2024 Dec 2, 2024 December 02, 2024 7:23 PM December 02, 2024 in News - Local

With President-Elect Donald Trump threatening to impose a 25% tariff on all goods coming from Mexico and Canada, one economist says it could mean higher prices on a new car.

Thomas Fullerton, an economist at the University of Texas - El Paso, said some goods cross the border more than once, and those taxes will add up.

Fullerton said that Trump’s plan to control illegal immigration into the U.S. with the increased tariffs could backfire on his campaign promise to lower the cost of product.

READ MORE: Trump's threat to impose tariffs could raise prices for consumers, colliding with promise for relief

Trump argues the move would bring jobs back to the United States by forcing manufacturers to close plants in other countries and open or expand U.S. plants.

“Every time a product enters the United States from either Canada or Mexico, they're gonna have to pay a 25% tariff,” Fullerton said. “These things are just gonna stack up on each other like pancakes, and after while consumers are going to face much higher prices."

Fullerton said many of the components in cars can cross international bridges four to 12 times. 

If Trump does put tariffs in place, in most cases the customer will pay the added price manufactures pay.

“It violates two of the most common campaign promises of the Trump administration, which was to lower inflation and increase economic growth. This is going to go in the opposite direction,” Fullerton said.

Watch the video above for the full story. 

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