An automotive industry research group has suggested that Jaguar Land Rover could suffer the most if President Trump enforces a harsh border tax on imports.
According to Baum & Associates LLC, Jaguar Land Rover will have to raise the prices of its U.S. models by over $17,000 per vehicle in the United States to recoup the costs lost by import tariffs. By comparison, Ford may only have to hike up its prices by $282 per vehicle while General Motors could increase them by $995.
Baum & Associates also estimates that Volvo could raise its prices by $7,600 while Volkswagen may employ $6,800 price increases per vehicle, reports The Detroit News.
However, if such international automakers have any hopes of remaining competitive in the U.S., it is unlikely that they would raise prices by more than a few thousand dollars and instead accept lower profits and sales.
The lead author of the report, Dan Luria, says that the proposed border tax could encourage automakers to boost U.S. production and reduce production elsewhere. The net result of this could be an additional 1 million vehicles being produced annually in the U.S. with 50,000 new jobs in the sector created.
However, large company’s like Toyota and Wal-Mart warn that prices of everyday consumables, including food, water and gasoline could all increase as a result.
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