Auto analysts and the auto companies are warning about the effects of a 25 percent tariff that they fear may be coming from President Trump on foreign-built cars. Sharply higher prices would cut sales, and cause job layoffs, according to the experts.
But one expert says, don’t expect that to happen. Robert Lutz, the retired auto industry executive, says he thinks this is a smokescreen for a later effort by Trump to re-adjust trade deals.
“This is a big stick to threaten everybody with,” Lutz tells CNBC. “My guess is that 25 percent is never going to happen. What he’s after, and God bless him, is to get a level playing field.”
Lutz says the playing field has been uneven for years, because U-S products are hit with tariffs and the steep European taxes before they are sold, but auto’s from Europe avoid those charges when they come to the U-S, where those vehicles are cheaper than they are in their home countries.