U.S. Automakers Unwilling To Move Production To American Factories: CNN

President Donald Trump has claimed that automakers can avoid his tariffs by simply shifting production to American factories—but it’s not that simple. Not by a long shot, Chris Isidore reported for CNN.

Even if automakers were to expand production in the US, tariffs would still increase the cost of so-called “American-made” vehicles by between $3,000 and $12,000 per unit. I Photo: General Motors

A range of tariffs have already been imposed or are about to take effect, significantly increasing the cost of manufacturing and purchasing new cars. 25% duties on steel and aluminum imports were recently implemented, while tariffs on cars from Asia and Europe are set to begin next month.

Perhaps most concerning for automakers, import taxes on all goods—including cars and auto parts from Canada and Mexico—have been announced, delayed twice, and are now scheduled to take effect in April.

Trump has heard industry pleas for tariff relief but insists the solution is simple: build cars in the US.

“He told them they should get on it—start investing, start moving, shift production here to the United States of America, where they will pay no tariffs,” White House Press Secretary Karoline Leavitt said earlier this month, after Trump postponed tariffs on most Canadian and Mexican imports for another month.

“That’s the ultimate goal.”

However, automakers argue that shifting production is neither quick nor straightforward. Trump’s inconsistent trade policies have created "a lot of cost and a lot of chaos," according to Ford CEO Jim Farley, but companies still aren’t willing to invest in new plants.

The primary reason? The uncertainty surrounding Trump’s ever-changing stance on tariffs.

“If they become permanent, then there’s a whole bunch of different things you have to think about—where to allocate plants, whether to move operations, and so on,” General Motors CFO Paul Jacobson explained.

However, he added that the company lacks clarity on future trade policies, making such major investments risky.

Even if automakers were to expand production in the US, tariffs would still increase the cost of so-called “American-made” vehicles by between $3,000 and $12,000 per unit, according to estimates from the Michigan-based Anderson Economic Group.