US: Auto tariffs would have destructive impact on world economy - Nomura
|Takahide Kiuchi, Executive Economist at Nomura, notes that the focus of US trade policy has now shifted to additional tariffs on US automobile-related imports.
Key Quotes
“We have already seen an outpouring of comments in opposition to the tariffs from the Japanese government and auto industry, and even from the US auto industry. The common view expressed in these comments is that the tariffs will hurt the US economy and employment.”
“If the Trump administration applies additional duties of 20% on all US imports of automobiles and automotive parts, US GDP would likely suffer a 0.3% dip in the near term. Japan’s GDP would likely be reduced by 0.5% over the medium and long term.”
“In the relatively short term, the tariffs are estimated to have a bigger negative impact on the US economy than on Japan’s economy. However, if Japanese companies shift from exporting domestic-made vehicles and parts to the US to making those products in the US, the longer-term impact on the Japanese economy would probably be greater.”
“The hope now is that strong criticism of the tariffs from US automakers at the public hearing will prompt the Trump administration to rethink its position on these tariffs.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.