Investment advisor sees 'pure chaos' in auto industry from tariffs

[BeyondGeography]

After speaking to auto industry experts from the U.S., Europe, and Asia, Wedbush Securities concluded President Trump’s 25% tariff on all cars and parts made outside the U.S. “would send the auto industry into pure chaos.” The move will raise the average price of cars between $5,000 on the low end and $10,000-$15,000 on the high end, the analyst tells investors in a research note.

Wedbush believes every auto maker in the world will have to raise prices selling into the U.S. while the supply chain logistics of the tariff announcement is “hard to even put our arms around at this moment.” A U.S. car with all U.S. parts made in the U.S. “is a fictional tale not even possible today,” according to the firm. Wedbush thinks it would take three years to move 10% of the auto supply chain to the U.S. and cost hundreds of billions “with much complexity and disruption.” It adds, “The concept of this auto tariff in our view would be a back breaker and Armageddon for the auto industry globally and throws the supply chain into pure panic mode.”

Wedbush believes the winner from these tariffs “is no one.” Even Tesla (TSLA) will; be hit and will be forced to raise prices, the analyst predicts. The news will continue to put “major pressure” on General Motors (GM) and other auto makers and suppliers until more clarity is learned from the White House, Wedbush says.

https://www.tipranks.com/news/the-fly/wedbush-sees-pure-chaos-in-auto-industry-from-tariffs