Still, there may be reasons for auto industry executives to relax a bit. On Friday, Chinese Commerce Ministry spokesman Gao Feng told reporters that “high-level contacts between the two sides on economics and trade have resumed following the November 1 conversation between the Chinese and American heads of state.” What, if anything, that might translate into remains uncertain, however.
Auto industry executives will also be watching closely to see if the administration actually does pull back from, rather than just delay, enacting section 232 tariffs.
Cody Lusk, the president of the American International Automobile Dealers Association, also appeared before the Trade Commission on Thursday, testifying that the group’s thousands of dealers “remain concerned about the potential for increased costs and lost auto jobs due to onerous new origin requirements, possible 232 tariffs, and crippling uncertainty stagnating an otherwise humming economy.”
For his part, Toyota brand boss Hollis told CNBC the automaker estimated that enacting 232 sanctions would add anywhere from $3,000 to $6,000 to the cost of the typical Toyota, even those assembled in the U.S., because of higher tariffs on imported parts.
“I’m as happy as the end consumer because it would put a tax on customers,” said Hollis.
There are few things the industry values more than stability, the Toyota executive noted, except, perhaps, for predictability. The continuing uncertainty about tariffs and trade — as well as other regulatory matters, such as a planned rollback of federal mileage standards is making it difficult for automakers to plan for the future. They can only hope that what happens next won’t drive up costs, drive down sales and deliver an even bigger hit to their earnings.
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