Whitman: Trump’s proposed border tax “would create mayhem” for U.S. auto industry
Marina Whitman is featured in AP auto writer Dee-Ann Durbin’s January 24 article, “How a Trump tariff could sideswipe U.S. auto industry.” Durbin reports President Trump is considering a tax on Mexican-made cars to pressure U.S. automakers to keep production in the U.S.
The problem, Whitman says, is that it is unprofitable for automakers to build small cars in the U.S. “[A]utomakers could try to pass along the cost to U.S. customers,” continues Durbin, but “that would raise the price tag” – in some cases, by thousands of dollars, putting them out of reach of some consumers.
“I don’t think the auto industry would turn up its feet and die,” says Whitman, “but it would be a terrible shock. It would create mayhem with their profitability.”
Durbin goes on to describe the tough choices U.S. automakers would face if Trump’s tariff is implemented. Options include staying the course, pivoting production, selling elsewhere, or passing the cost to customers.
Marina v.N. Whitman is a professor of business administration and public policy at the University of Michigan. Professor Whitman served as a member of the President's Council of Economic Advisers from 1972-73 and as vice president and chief economist of General Motors Corporation from 1979-92.