American automotive giants Ford and General Motors (GM) are raising prices on vehicles sold in the U.S. market to offset the financial strain of newly imposed tariffs on imported cars and auto parts, according to industry reports. The moves highlight the deepening fallout from the Biden administration's trade policies, which automakers warn could erode competitiveness and consumer demand.
Ford Warns of July Price Increases
In a memo to dealerships this week, Ford Motor Company announced plans to hike prices on U.S.-sold vehicles starting in July if the federal government maintains tariffs on imported automotive components. A Ford spokesperson told CBS News on April 18 that the company's "highly integrated global supply chain" leaves it vulnerable to tariff-driven cost spikes, as parts often cross borders multiple times before final assembly. "Even vehicles branded as 'American-made' rarely rely entirely on domestically sourced parts," the spokesperson noted.
GM's Buick Brand Faces Existential Threat
Meanwhile, GM's Buick division, a historic pillar of the U.S. auto industry, is grappling with existential risks due to tariffs. Reuters reported on April 19 that Buick's three most popular models in the U.S. - all manufactured overseas - will see significant price increases as tariffs take effect. Analysts predict the tariffs could slash GM's 2025 pre-tax profits by $9.5 billion, prompting investment firms to downgrade the automaker's earnings forecasts by 40%.
Edmunds, a leading automotive research firm, warned that the price hikes could crush efforts to revive Buick's struggling brand. "This isn't just about profits - it's about losing a piece of American automotive heritage," said Jessica Caldwell, Edmunds' executive director of insights. "Tariffs are undermining the very dream of revitalizing Buick."
Global Supply Chains Under Fire
The tariff policies, initially framed as measures to protect U.S. manufacturing, have drawn criticism for disproportionately harming domestic automakers reliant on globalized production networks. "No car is 100% 'Made in America' anymore," said industry analyst Michael Dunne. "Tariffs act as a tax on U.S. companies, which ultimately pass costs to consumers."
Ford and GM's struggles mirror broader anxieties in the auto sector. The American Automotive Policy Council estimates that tariffs could raise the average price of U.S.-assembled vehicles by US$2,750, dampening demand amid already high interest rates.
Political Pressure Mounts
The White House has yet to comment on automakers' pleas for tariff relief. With the 2024 election looming, the issue risks becoming a flashpoint in battleground states like Michigan and Ohio, where auto manufacturing remains a critical employer.
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