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Detroit car manufacturers to speak out against auto import tax

Posted at 5:04 PM, Jul 18, 2018
and last updated 2018-07-18 21:16:07-04
Michigan's automotive roots run deep, and the economy is very connected with the health of the industry. So all eyes are on Capitol Hill as testimony and debate continue about whether to impose a 25% auto import tax. 
 
In the midst of a U.S. Commerce Dept investigation to determine whether the "domestic automobile and automotive parts production threatens to weaken the internal economy of the United States" posing a national threat, President Trump is proposing a 20-25 percent import tariff for vehicles and parts. 
 
Automakers, manufacturers and suppliers have spoken out against those tariffs and Thursday they testify in a public hearing. 
 
The United Auto Workers Union is testifying in support of the investigation, but not necessarily the hefty tax. They say the tariffs could have a positive or negative impact depending on the scope and how they are imposed. 
 
Michelle Krebs, Executive Analyst for Auto Trader says a 25 percent import tariff could be disastrous to the economy.
 
"It will hurt the consumer in particular because car prices will be higher," says Krebs. 
 
The price increase would vary from vehicle to vehicle and domestic automakers would be hit hard estimating the price of cars would increase an average of $5000.
 
Krebs says when prices increase, sales drop, dealers cut back, production drops, jobs are cut ... its a domino effect.
 
"It’s like fabric it’s all woven together," says Krebs.
 
Here in Michigan, the auto industry generates 70 billion dollars in tax revenue for Michigan and about 500 billion dollars in paychecks according to Governors office.
 
So what happens in the auto industry impacts us all.
 
If tariffs are imposed, there could be one segment of the industry that comes out on top.
 
"We do think the beneficiary will be used vehicles and there’s a lot of those because there was so much leasing," says Krebs.
 
U.S. automakers and lobbyists for Detroit manufacturers will testify at a public comment hearing organized by the U.S. Commerce Department on Thursday.