When Detroit’s automakers report earnings on Wednesday, they are likely to highlight escalating tariffs and use the opportunity to warn investors of far greater pain ahead should U.S. President Donald Trump impose broader tariffs on the industry’s vehicles and parts, consultants and analysts said.
This story by Nick Carey and Ben Klayman appeared in Automotive News.
“The automakers really want to get that narrative out there,” said Jeff Schuster, president for the Americas at consultancy LMC Automotive, who stressed it is unusual for General Motors, Ford Motor Co. and Fiat Chrysler Automobiles to post quarterly earnings on the same day.
“All three automakers are on the same page with tariffs,” he added. “They can demonstrate the impact so far and warn about the risks of taking this further.”
The metals tariffs have pushed up steel and aluminum prices, raising costs and concerns in the auto industry, which expects vehicles sales to decline in 2018.
Early this year, even before tariffs became a reality, Ford warned that rising aluminum and steel costs would hurt 2018 profits.
Administration officials have said the potential tariffs are in part designed to win concessions during the ongoing renegotiation of the North American Free Trade Agreement (NAFTA) with Canada and Mexico.
GM has already warned that higher tariffs on imported vehicles under consideration by Trump’s administration could cost jobs and lead to a “a smaller GM” while isolating U.S. businesses from the global market.
A group representing major automakers said on Thursday that imposing tariffs of 25 percent on imported cars and parts would raise the price of U.S. vehicles by $83 billion annually and cost hundreds of thousands of jobs.