Khodrocar – Automotive industry is one of the important industries for Donald Trump and his government during his presidency, the decisions he made had many effects on this industry, directly and indirectly. But these effects was so negative. According to the latest report of OICA about production statistics of countries, United States is standing in the second place of this list with 8.13 percent drop in the production.
The important question is that what is that how Donald Trump decisions affected US automotive industry?
The important factor was the issuance of an order to cancel the investment and reduce the production of American automakers in Mexico.
In 2015, 3.4 million vehicles were produced in Mexico and 70 percent of them was exported to the North America. In addition, many American companies of production lines in Mexico and Trump’s unstable relationship with Mexico caused many problems for companies like Ford and GM.
For example Ford was up to invest 1.6 million dollars into one of its plants in Mexico but after Trump’s issuance the managed to cancel it.
According to USAToday, the cost of assembling a car in Mexico is about 80% less than the cost of assembling the same car in the United States. Things like this could increase the production’s cost for American automakers.
On the other hand, US president banned the entrance seven Muslim-majority countries. The companies condemned this decision because many of American workers belongs to other countries including these seven Muslim ones. This mean the lack of workforce and production cost increase.
"Make in USA or pay higher import taxes.” This was the words of US president in one of his press conferences. Trump’s government has always warned German and Japanese carmakers that they should reduce their imports to USA and increase their production or, pay higher tax. This has discouraged these carmakers from producing and even importing cars to the United States.
On the other hand, recently Trump said that he is going to increase the tariffs on Steel and Aluminum. Companies need steel and aluminum to make cars and tariff increments can increase the production costs for carmakers.
We should wait and see that is Trump’s decision going to make everything worst or not.
Khodrocar Reporter and Translator: Maziyar Jafarieh