Toyota Says Steel Import Tariffs Will Make US Cars More Expensive

Toyota has told American car buyers to brace for higher prices in the near future, in the wake of President Trump’s decision to slap large tariffs on imported steel and aluminium.

Despite saying that it uses around 90 per cent US-made steel and aluminium in the cars it makes in that country, Toyota says the new 25 per cent tariff on foreign steel (10 per cent on imported aluminium) will ‘substantially raise production costs’. That means future customers’ wallets will inevitably take a beating.

Suppliers of metal components will also have to put their prices up, especially where contracts are already in place to source steel from outside the US. Those costs will find their way into the headline price of car makers’ new models.

Steel import tariffs have been tried by the US before. The taxes imposed in 2002 were eventually judged to have cost the US economy around 200,000 jobs, and a study concluded that the domestic impacts outweighed any benefits. The tariffs were eventually lifted when the EU responded with similar tariffs punishing key US industries.

Sources: Reuters/Wikipedia