“On Feb. 17, the U.S. Commerce Department began an investigation under section 232 of the Trade Expansion Act of 1962 into whether there are national security implications tied to $360 billion in auto imports, including vehicles and parts,” writes RSM Chief Economist Joe Brusuelas in the April edition of The Real Economy. “The administration has until late May or early June to decide whether to impose a proposed 25 percent tariff on these products. Based on our contacts in each party across Congress and the agencies in Washington D.C., we believe that the president will act to impose tariffs.”
“This 25 percent tariff would be equivalent to a $90 billion tax on U.S. producers and consumers,” Brusuelas says. “Our colleagues at London-based IHS Markit have estimated that the imposition of this tax would result in a $290 billion drag on GDP over the next decade, with dead-weight losses of $22 billion in 2019 and $31 billion in 2020 to overall economic activity.”
Read the full report on the risk of automotive tariffs to the U.S. economy, and more insights from Brusuelas about other trade risks facing middle market companies in The Real Economy.
