According to the Nippon Keizai Shimbun, the analysis shows that the protectionist policies to be implemented by the next US President Donald Trump may increase the production cost of US cars by 40 billion US dollars a year and hinder the development of decarbonization and artificial intelligence technology in the United States.
According to Donald Trump’s official website, Trump plans to impose tariffs of “10% to 20%” on all imports and additional duties on certain products.
The president of the United States can raise tariffs by exercising the International Emergency Economic Powers Act without the approval of the United States Congress.
The high import tariffs that Trump wants to impose will have a major impact on the US auto industry.
The United States sells 15 million cars a year, second only to China.
Many of the cars in the United States are imported from Mexico, Canada and Japan, and higher import duties will lead to higher car prices.
These import duties apply not only to vehicles, but also to auto parts.
Mexico has previously been able to exempt the United States from import tariffs, benefiting from the United States-Mexico-Canada Agreement.
From January to June this year, imports from Mexico accounted for 41% of all auto parts imported into the United States.
Because of trade tensions between the United States and China, carmakers have increased their purchases from Mexico rather than China, but now Mexico faces the risk of high import tariffs from the United States.
Toyota recently said it plans to invest $1.
45 billion in Mexico to increase production of its next-generation Tacoma pickup truck for the American market.
But the future is still uncertain.
AlixPartners, a US consultancy, calculated that if high tariffs were imposed on imported car parts, the production cost of each US-made car could increase by as much as $4000.
Based on the production of 10 million cars a year in the United States, this will add $40 billion to the cost.
If Trump imposes high import tariffs, not only will the auto industry be forced to increase production in the United States, but other manufacturing industries, such as steel and machinery, will also have to do so.
The Taxation Foundation (Tax Foundation), a US think-tank, estimates that US import tariffs could increase US revenue by $3.
8 trillion in the long run.
But there are concerns that companies that serve American customers will cover higher costs by raising prices.
In addition, the renewable energy industry will also face rising prices.
Trump believes that reducing energy costs is the trump card to prevent the resurgence of inflation.
To that end, he may encourage increased production and new development of fossil fuels, and plans to expand exports of liquefied natural gas.
Trump also proposed to withdraw from the Paris Climate change Agreement, which runs counter to the global trend.
The Biden administration has attracted a total of $265 billion in decarbonization investment from domestic and foreign companies through huge subsidies, but some of that investment is likely to be withdrawn.
In addition, Trump’s support for renewable energy power generation is likely to decline.
The industry research department of Mizuho Bank said Trump’s tough attitude towards offshore wind power could lead to the shelving of the project.
It is hoped that the deregulation and tax cuts implemented after Trump takes office again will reduce operating costs.
At the same time, it is expected that the Biden administration’s increased scrutiny of mergers and acquisitions of domestic companies will be relaxed during the Trump administration.
But these benefits may be offset by the rising costs of domestic trade-oriented policies in the US.
Trump has been promoting the “America first” approach, which has been described as “unilateralism”.
If he takes office again, he may take a more radical approach to take back American jobs and industrial development opportunities.
It can be said that Trump’s policy approach focuses on practical interests.
His inward-looking trade policy may also change with diplomatic negotiations.
In the face of this uncertainty, enterprises need to be prepared for a variety of situations.
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