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Tariffs On Imported Cars, Parts, Could Tip The U.S. Economy Into Recession: Cox Automotive
Friday March 29, 2019
Article Highlights
- On top of other headwinds, like record-high prices for cars and trucks, the recently renewed threat of new, 25% tariffs on imported vehicles and parts is a big risk factor for U.S. auto sales, he said.
- He said automakers could reduce their exposure to the tariffs by moving production to within the United States, but that takes time, and Smoke said there’s no way automakers in the U.S. could entirely eliminate imported parts.
- “There isn’t a single vehicle that doesn’t have parts from someplace in the world. So, it’ll be disruptive,” he said.
Forbes, March 28, 2019 — The r-word, for “recession,” came up a lot in a conference call with Jonathan Smoke, chief economist for Atlanta-based Cox Automotive, to discuss U.S. auto sales in March as well as the U.S. economy in general.
Smoke described the economy as experiencing “rapid deceleration,” in a conference call on March 28. On top of other headwinds, like record-high prices for cars and trucks, the recently renewed threat of new, 25% tariffs on imported vehicles and parts is a big risk factor for U.S. auto sales, he said.
Tariffs could tip the U.S. auto industry into a recession, which in turn could threaten the rest of the U.S. economy, Smoke said. He said the likelihood of a recession rises to “above 50 percent” in early 2020.