Trump’s Auto Tariffs Are Devastating: Is Your Business Prepared?
“It seems like it is going to be so devastating,” says Kristen Dziczek, vice president of economics at the Center for Automotive Research, “that I can’t imagine that they’re actually going to do it.”
To help, the Business Financing Advisors at NBC broke down the “what,” “when” “why” of Trump’s new auto tariffs, explore how the plan threatens the US auto industry, and provide insight as to how all automotive businesses should be prepping their company for a near future that could prove devastating.
Trump’s Auto Tariff Breakdown
What Are They?
Trump is planning to place a 25% tariff on all foreign vehicles and auto parts from Canada and Mexico. Earlier today, the President also threatened to place a 20% tariff on imported European vehicles and parts.
When Does it Go Into Action?
While the plan is still under legal review by Trump’s Commerce Department to prove the tariffs are a non-threat to national security, auto tariffs are expected to go into effect towards the start of the November midterm elections, leaving business owners with very little time to prepare.
Why is Trump Doing This? (2 Reasons)
1. The foreign auto tariff is being put in place as a way to bolster the US production and sales of US-based parts and vehicles. Trump hopes that by raising prices on imports, US auto business owners and consumers will be encouraged to pursue the lower prices on American-made vehicles and parts.
2. The tariffs also act as Trump’s push-back on tariffs placed on US imports on the EU. The EU initiated this in retaliation against Trump’s tariffs on foreign steel and aluminum a few months back.
In the same day the EU announced their plan, Trump announced his EU tariff plan on the same day that the EU put forth their tariff plan on the US.
The plan was created only 3 months after the President placed a similar 25% tariff on foreign steel and 10% on imported aluminum from China, and for similar reasons.
Brief Aside: Urgent Help for US Manufacturers
If you own or know someone who owns a manufacturing business that’s suffering under these tariffs, share this link with them to help them out: Trump’s Steel and Aluminum Tariffs: Help for US Manufacturers And send them our way. We’ve already been helping hundreds of US manufacturers learn how to get the advice and financing they need to protect themselves from financial instability.
How Will The Tariffs This Affect the US Auto Industry?
However well Trump’s intentions are for strengthening the US economy, auto industry leaders and experts are predicting nothing but sharp rises in prices, lower sales, and job cuts for unprepared auto businesses to come as a result.
NBC has been helping manufacturing businesses across the country get the financing they need to stand up to Trump’s steel and aluminum tariffs since March–with enormously successful results–and now we plan to do the same for the auto industry.
That’s why you’ll find a solution from NBC for each of the major obstacles listed below that auto companies of all kinds will soon face:
Higher Prices, & Lower Sales
While Trump’s tariffs are sure to sway consumers away from multiplied foreign auto prices, automotive businesses that deal with imported automotive products are expected to get hit hard.
This includes all automotive businesses—from those who work exclusively with foreign vehicles and parts, such as car dealerships that only deal with products from foreign manufacturers, and auto repair shops that are in constant need of imported components on a daily basis.
Rising prices and lower sales are going to make it incredibly difficult for business owners to get what they need to serve their customers. This will lead to a lower intake volume of customers, and financial struggle for most. The cost of vehicles and their parts are already some of the biggest burdens facing auto business owners on a daily basis—with the introduction of Trump’s tariffs, the weight could be crushing.
Solution 1: Form New Supplier Relationships
A vast majority of automotive businesses have most of their inventory imported from the same foreign countries affected by the tariffs—Mexico, Canada, China and the EU—due to their significantly lower costs. Now it’s time to make new friends—whether they be middle-men that make business off selling foreign auto parts, or suppliers that sell what will become lower-priced products that do the job just as well…
At least until the trade war subsides, and auto practices return to normal. NBC has saved their manufacturing clients who have followed this simple advice countless amounts of working capital that prevented them from having to make damaging budget cuts that would have resulted in job loss, and lower customer care (more on that later).
But even more importantly…
Solution 2: Stock Up On Inventory (This is Crucial)
Stock up now, while prices are stable, because they won’t be for long. Thousands of auto businesses are already getting a head start on this before business goes haywire. Projections show that doing so could save businesses anywhere from thousands to hundreds of thousands of dollars. NBC has already begun supplying auto businesses nationwide with emergency business lines of credit, which are often the fastest and easiest way for business owners to make large, spontaneous, and continuous purchases risking of overpayment on any materials they don’t use.
To make it quick and easy, NBC is supplying business LOC’s to auto business owners in as little as 24 hours after applying—regardless of credit score and financial history. You can apply online here right away if you think a business line of credit is right for you.
But most importantly:
With rising costs and lower prices, costs are going to have to be cut in one way or another to stay afloat. Auto business owners will have no choice but to start letting people go. And in a time when finding competent labor is damn-near impossible to find, keeping your trusted employees close is more important than ever.
Solution: Equip Your Business With Long-Lasting Capital, and DON’T LET YOUR WORKERS GO!
If you’re going to survive through these heavy tariffs with your entire crew intact, you’re going to need a solid financial strategy, and fast. You’re going to need to ensure your crew their livelihood is safe by equipping your business with enough working capital to eliminate the large gaps in funding and much, much lower sales most auto companies are sure to face.
NBC’s Business Financing Advisors have saved businesses from letting their most skilled and trusted workers go by getting equipping them with long term small business loans with terms that can accommodate to any business need (again, of course, regardless of credit score and financial history).
Start Preparing Your Business for Foreign Auto Tariffs Now
NBC wants nothing more than to help main street auto business owners survive through the hard times to come. Call (877) 482-3008 to speak with a Business Financing Advisor, or fill out this 1-minute application online to get the ball rolling today.