Global automobile production may contract by 2% as a result of imposed US tariffs.
A heads-up, I'm dishing the raw truth, no sugarcoating here!
Uh-oh, looks like the automotive industry is taking a hit again. Reports are showin' a drop of 1.55 million units in auto production compared to 2024, markin' the second year in a row it's fallin'. With nearly 16 million vehicles sold annually in the good ol' USA, it's the second biggest market only to China. Half of these cars are imports, with around 30-60% of their parts comin' from abroad.
Now, thanks to Donald Trump's tariffs, new vehicle sales in the USA might decrease by 3%, and production in North America could drop by 9%. If you're wonderin', 25% tariffs on imported vehicles and parts produc'ed outside the USA kicked in from April 3. The Prez clarified that vehicles made under USMCA agreement will only be taxed for their "non-US content."
Some big names like Nissan, Volvo, and Mercedes-Benz are considerin' movin' production to the USA, while others, like Aston Martin and Jaguar Land Rover, have halted shipments to the country. The global automotive industry thinks the impact of these tariffs is gonna be as hefty as the COVID-19 pandemic and the 2008 global financial crisis, according to the Financial Times, citin' a high-rankin' exec. The bad news is, the downturn is expected to start rollin' in summer 2025.
Here's the lowdown: These tariffs are likely to increase the overall costs for domestic automakers by around $107.7 billion in 2025. It could lead to higher prices for consumers, decreased demand, and lower profits for manufacturers. Economists and experts foresee an economic slowdown and potential recessionary actions due to these tariffs. The downturn could become more apparent around mid-2025 as these tariffs start to take full effect.
If things don't change, financial markets could be lookin' at some significant declines, possibly leadin' to a market crash. Stock values have already shown drops since these announcements. So, buckle up, 'cause it's gonna be a bumpy ride!
Wanna stay in the loop? Join our Telegram channel @expert_mag
- #AutomotiveIndustry
- #Tariffs
- #EconomicImpact
- #GlobalRecession
- The current state of the economy is heading towards potential recession as a result of increased tariffs on imported vehicles and parts, affecting the automotive industry significantly.
- The financial sector could be impacted severely, with economic experts predicting market declines and possibly a market crash due to the tariffs' ripple effects.
- The downturn in the automotive industry, finance, and overall economy might also influence other industries like transportation, as lower demand and increased costs could affect various businesses.
