FOR IMMEDIATE RELEASE
March 28, 2025
Contact: media@americanautomakers.org
Dr. Art Laffer Report on Impact of Tariffs outlines solution for American Automakers
Washington, D.C. – A new report from American economist Dr. Art Laffer titled, Impact of a 25% Tariff on U.S. Auto Industry, shows how a 25% tariff on auto imports would raise vehicle prices in the U.S., disrupt long-term investment cycles, and create uncertainty by weakening consumer confidence and supply chain stability. The report offers a solution by leveraging our Canadian and Mexican trading partners.
American Automakers rely on predictable trade policies to make strategic decisions, especially as the industry transitions to advanced manufacturing and diversifying their products. Allowing trade under the rules of President Trump’s USMCA is essential to ensuring the U.S. auto sector remains competitive and leads the global auto industry in growth.
Highlights from the report show:
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The proposed 25% tariff could disrupt supply chains, weaken investor and consumer confidence, and trigger retaliatory measures, impacting the broader North American economy.
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U.S. auto manufacturers face significant competitive risks, as the tariff would shrink profit margins and reduce their ability to compete globally, potentially leading to job losses and slower innovation.
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The tariff would make it economically impossible for manufacturers to absorb costs, leading to higher vehicle prices and jeopardizing future investments in the industry's long-term competitiveness.
- Leveraging our strategic trading partnerships with Mexico and Canada would save Americans about $2000 per new car, while still encouraging automakers to build more in America.
“We remain committed to President Trump’s vision of increasing automotive production and jobs in the United States. Ensuring a fair and predictable trade environment is essential to strengthening the U.S. auto industry, supporting American jobs, and maintaining our country’s global competitiveness. Dr. Laffer’s determination that the U.S. industry can thrive with our Canadian and Mexican partners is absolutely correct,” said Governor Matt Blunt, president of the American Automotive Policy Council.
The American Automotive Policy Council (AAPC) represents American Automakers Ford Motor Company, General Motors Company and Stellantis. AAPC is a Washington, D.C. association representing the common public policy interests of its member companies.
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