Taxes and NAFTA: Can Trump’s cure for American manufacturing bolster the auto industry?

Why the most ‘American’ car is a Toyota

The Toyota Camry supported more U.S. assembly-plant jobs in 2016 than any other car, based on sales, parts and place of final assembly. When including exports, the Honda Accord shot to the top, according to Cars.com, which uses various factors to rank the most American-made cars.

A primary consideration is the use of domestic parts made in the U.S. and Canada as a percentage, based on cost. These have been listed on the so-called Monroney sticker since 1994. “The American Automobile Labeling Act, while imperfect, is the only ratings system that the public can see on any new car or truck,” according to Kelsey Mays, a senior editor at Cars.com.

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The parts content information from a Tesla Model X Monroney sticker.

Yet, that percentage has little effect on whether a car is “Made in the U.S.A.” As long as final assembly takes place in the states, automakers can make the claim.

The “Big Three” automakers — General Motors, Ford and Chrysler (now the American subsidiary of Fiat Chrysler) — produce many of their vehicles in the U.S., Canada, Mexico and in other countries around the world. The only other domestic nameplate is Tesla, which assembles vehicles in Fremont, Calif.

A border tax added to automobiles built in Mexico — mostly sedans and small cars that are less popular in the era of relatively cheap gas – would likely raise the price of those vehicles. Taxes on parts would have to be absorbed by the manufacturers, offset by possible tax credits or simply passed on to the customer.

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