Uncertainty of trade tariffs lurks in background as officials celebrate Huntsville auto plant groundbreaking

 

HUNTSVILLE, Ala. – While Alabama, Mazda and Toyota leaders celebrated at Friday’s groundbreaking of Huntsville’s $1.6 billion assembly plant, the future appears cloudy.

They’re excited about the future, but they’re also concerned about potential tariffs on the automotive industry.

There’s uncertainty of what will happen if tariffs are placed on imported cars and car parts.

“That would be tough for us consumers,” said Toyota North America CEO Jim Lentz. “It would raise the prices of all vehicles in the U.S., because there’s not a 100-percent-built U.S. vehicle.”

In light of ongoing trade disputes with countries like China and Japan, President Trump has threatened a 25 percent tax on car imports. The Trump administration says imposing those tariffs is on hold at the moment, but not off the table. That could have big consequences for places like Alabama.

“We need to make sure we get it right and not use the automobile industry as a stick for another part of the sector of our economy,” said U.S. Sen. Doug Jones. “That’s what I’m concerned about. We don’t want to let anything happen to what we’ve got going on here.”

Jones said he is working at the federal level to protect the automotive industry that employs 57,000 Alabamians now. He said he believes there are better ways than tariffs to ensure America gets more fair trade deals.

Lentz said the tariffs could impact the new plant, which is projected to be up and running in 2021.

“It will impact the costs of parts that go into this plant, because it’s impossible to source 100 percent from the U.S.,” he said. “No one does that, so it could impact the cost. And again, depending on how much it impacts the cost, it is possible it could impact over volumes.”

Lentz said if that happened, the company would also likely cut jobs.

According to Lentz, a 25 percent tax on cars and parts would increase the price of a Toyota Camry — which is mostly American-made — by at least $1,800. He estimates the price of some imported vehicles would increase by as much as $6,000.