It hasn't even been a day since President Donald Trump announced his intention to add tariffs to imported metal, and already, Toyota is telling its suppliers and the buying public to hold on tight.
"The [Trump] Administration's decision to impose substantial steel and aluminum tariffs will adversely impact automakers, the automotive supplier community and consumers," Toyota told Reuters late yesterday, in response to new planned tariffs on both steel and aluminum.
Even though Toyota claims to use 90 percent domestic steel and aluminum in the cars it builds Stateside, the tariffs will still have negative ramifications on the company, which will likely be passed on to the consumer by way of higher window stickers. The tariffs can also affect suppliers and other members of the automotive supply chain, which still relies on a variety of metals for vehicle manufacturing.
Under the plan, which is expected to receive a formal announcement next week, steel will be hit with a 25 percent import duty, while aluminum will receive a smaller import tariff at 10 percent.
It bears noting that the last time this was tried in 2002, the World Trade Organization authorized more than $2 billion in sanctions for breaking tariff-rate commitments, and it was believed that the tariffs shrunk the US economy by approximately 200,000 jobs. The tariffs were only withdrawn once the European Union started applying counter-tariffs to US products made in election swing states.