Economy

GM may slash American jobs because of Trump tariffs

GM may slash American jobs because of Trump tariffs

In its 15-page submission to the Department of Commerce, Toyota echoed GM's sentiments, adding that tariffs "would have a negative impact on all manufacturers, increasing the cost of imported vehicles as well as domestically produced vehicles that rely on imported parts".

The company noted that Trump has repeatedly praised the automaker for investing in the United States, including a new $1.3bn joint venture assembly plant in Alabama with Mazda.

In a filing with the U.S. Department of Commerce, the company said import tariffs "could lead to a smaller GM" with a reduced footprint at home and overseas, if the tariffs aren't "tailored" to advance economic and national security objectives.

Studies estimate that tariffs could increase the price of an imported $30,000 auto by about $6,400 and cause up to 195,000 US workers to lose their jobs, JAMA said.

GM also warned that the additional auto tariffs - on top of the steel and aluminum tariffs already in place - would at some point trickle down and be felt by customers, affecting demand for new vehicles.

General Motors may have to slash its American workforce to compete in Europe as a result of Trump's tariffs, the New York Times reports. "But we believe that a potential 25 per cent tariff on imported vehicles and auto parts will, in fact, have the opposite affect".

Trump argued that his administration was imposing the tariffs in the interest of USA national security, citing rarely used Section 232 laws.

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"Alternatively, if prices are not increased and we opt to bear the burden of tariffs or plant moves, this could lead to less investment, fewer jobs, and lower wages for our employees", the automaker warned.

President Donald Trump has repeatedly pressed both USA and foreign auto makers to build more vehicles in the US, which would create jobs in rust-belt states that helped elect him.

Last year, about 36% of GM's USA sales were imported, or about 1.1 million vehicles, according to research firm LMC Automotive.

"It is now also increasingly clear that the way the steel and aluminium tariffs have been used will result in retaliatory tariffs from our largest trading partners and closest allies, and that retaliation will have serious negative economic impacts on the United States", they wrote in a letter to U.S. senators. A tariff is a tax and it will be paid by American consumers.

U.S. auto production has doubled over the past decade, and the sector employs almost 8 million Americans - almost 50 percent more than it employed in 2011, according to the U.S. Chamber of Commerce.

It warned that an auto tariff would probably raise the cost of making some cars by thousands of dollars.


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