Jaunt Logo

    Aluminum & Steel Tariffs

    Aluminum & Steel Tariffs

    F1 week ago 49

    The automotive sector faces headwinds from tariffs. Analyzing the initial impacts of steel and aluminum levies and the potential ramifications of tariffs on vehicles imported from key regions like Canada, Mexico, and the EU. Explore how leading automotive companies are adapting to manage costs, adjust strategies, and the anticipated impact on profits and consumer prices.

    Aluminum & Steel Tariffs
• Effective March 23, 2018, President Trump 
imposed a 25 percent tariff on steel imports 
and a 10 percent tariff on aluminum imports.
• Although initially exempted by the tariffs, 
Canada, Mexico and the European Union (EU) 
had the tariffs applied to their U.S. steel and 
aluminum exports on June 1.
Automotive Tariffs
• The US implemented a 25% tariff on 50 billion 
dollars of Chinese products including cars on 
July 6th.
• The President has also proposed increasing 
U.S. tariffs from 2.5% to 25% on all automobiles 
and parts imported from Canada, Mexico and 
the EU.
Effects of Steel & Aluminum Tariffs on the Automotive Market
Incremental Price Increases and Revised Outlooks– Ford and GM both revised their FY2018 outlooks due to 
increasing commodity costs. The estimated price increases due to steel and aluminum tariffs are between $200 
and $300. 
Several Brands Won’t See An Impact Until 2019 – Some brand like Fiat Chrysler Automobiles have negotiated 
steel contracts through the end of 2018 so any financial impact won’t be felt until next year.
Effect of a Potential Automotive Tariff on the Automotive Market
Tariffs on China –The 25% tariff on Chinese produced goods may affect Ford’s plans to produce their next 
generation Focus in China and will raise the price of the Buick Envision.
Automotive Tariffs a Significant Impact – Automotive tariffs on the EU, Canada, and Mexico remain a proposal 
but could have a significant impact on the economy. These tariffs stand to raise automotive prices over $6,000 
on average per vehicle. A 25-percent tariff on all automobile and parts imports would result in 2 million fewer 
U.S. vehicle sales, 715,000 fewer U.S. jobs and nearly $60 billion in lower U.S. economic output
Aluminum and steel tariffs have had a significant impact on the automotive industry but the real threat is a 
potential 25% tariff on cars and parts imported from the Canada, Mexico and the EU. The industry is already 
feeling the effects of the tariff on Chinese goods instituted in July.
Tariffs/Automotive
proactiveworldwide.com Proactive Worldwide, Inc. 
1699 E. Woodfield Road, Suite 406
Schaumburg, IL 60173, USA
Jeff Mansfield, SVP, Consumer & Industrial Goods 
O: 847 483-7375 M: 630-220-4609
Jeffm@proactiveworldwide.com
    1/3
    Companies Eff ect of Current Steel & 
Aluminum Tariff s
Potential Eff ect of an 
Automotive Tariff 
• The tariff s have already resulted 
in $145 million in higher 
commodity costs for Ford.
• Commodity costs could rise to as 
much as $600 million for the full 
year.
• Ford will experience a 1% overall 
increase in cost for their F-series 
pickups that imports aluminum 
from Canada.
• Tariff s on passenger vehicle 
produced in China may change 
Ford’s plans to produce their next 
generation focus in China.
• Ford uses a large percentage 
of imported parts that would be 
eff ected by a 25% tariff .
• GM turned a $2.4 billion profi t 
for the second quarter of 2018 
but reported $300 million in increased commodity costs.
• GM slashed its profi t outlook for 
FY2018 given the increased commodity costs.
• Last year, about 36% of GM’s U.S. 
sales were of imported vehicles 
made outside the U.S., or about 
1.1 million vehicles .  
• A tariff on imported vehicle will 
have a signifi cant impact on the 
company’s bottom line as they 
are already feeling the eff ects of 
the tariff on Chinese goods with 
the Buick Envision.
• The carmaker's current contracts 
for large steel purchases shield 
it from the impact of the duties 
through the end of 2018.
• The company has incorporated 
into its 2019 outlook higher steel 
prices due to the 25 percent tariff .
• Fiat Chrysler Automobiles is 
making plans to adjust its global 
manufacturing footprint as President Donald Trump’s threats over 
levies escalate.
• A 25 percent tariff on imports 
would reduce FCA's profi ts by up 
to 743 million euros ($866 million) 
annually.
• The company saw limited impact 
from steel and aluminum tariff s 
on its bottom line.
• Toyota said the impact of U.S. 
steel and aluminum tariff s would 
reduce operating profi t by a little 
under $100 million.
• Based on the roughly 709,000 
vehicles Toyota exported to the 
United States from Japan in 2017, 
the automaker could take an 
annual tariff -related hit of $4.25 
billion on those vehicles alone.
proactiveworldwide.com Proactive Worldwide, Inc. 
1699 E. Woodfi eld Road, Suite 406
Schaumburg, IL 60173, USA
Jeff Mansfi eld, SVP, Consumer & Industrial Goods 
O: 847 483-7375 M: 630-220-4609
Jeff m@proactiveworldwide.com
    2/3
    Ways that Proactive Can Help
Proactive Worldwide specializes in market, customer, and competitive insights that provide the intelligence that 
will keep you informed and Out in Front of market developments. Find out how PWW can help you navigate 
sourcing, manufacturing and international trade challenges by:
proactiveworldwide.com Proactive Worldwide, Inc. 
1699 E. Woodfield Road, Suite 406
Schaumburg, IL 60173, USA
Jeff Mansfield, SVP, Consumer & Industrial Goods 
O: 847 483-7375 M: 630-220-4609
Jeffm@proactiveworldwide.com
 Providing insight on how competitors are adapting to the new trade realities 
and what that means to your specific organization.
Executing studies that identify threats to current manufacturing processes 
being affected by the trade war.
 Identifying opportunities that arise in the market as well as competitors’ 
strategies.
 Understanding how the market is being transformed and identifying the actions 
needed to adapt to new realities.
By leveraging our automotive expertise, Proactive Worldwide can provide research and strategic analysis 
about potential or future threats and opportunities.
1
2
3
4
    3/3

    Aluminum & Steel Tariffs

    • 1. Aluminum & Steel Tariffs • Effective March 23, 2018, President Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports. • Although initially exempted by the tariffs, Canada, Mexico and the European Union (EU) had the tariffs applied to their U.S. steel and aluminum exports on June 1. Automotive Tariffs • The US implemented a 25% tariff on 50 billion dollars of Chinese products including cars on July 6th. • The President has also proposed increasing U.S. tariffs from 2.5% to 25% on all automobiles and parts imported from Canada, Mexico and the EU. Effects of Steel & Aluminum Tariffs on the Automotive Market Incremental Price Increases and Revised Outlooks– Ford and GM both revised their FY2018 outlooks due to increasing commodity costs. The estimated price increases due to steel and aluminum tariffs are between $200 and $300. Several Brands Won’t See An Impact Until 2019 – Some brand like Fiat Chrysler Automobiles have negotiated steel contracts through the end of 2018 so any financial impact won’t be felt until next year. Effect of a Potential Automotive Tariff on the Automotive Market Tariffs on China –The 25% tariff on Chinese produced goods may affect Ford’s plans to produce their next generation Focus in China and will raise the price of the Buick Envision. Automotive Tariffs a Significant Impact – Automotive tariffs on the EU, Canada, and Mexico remain a proposal but could have a significant impact on the economy. These tariffs stand to raise automotive prices over $6,000 on average per vehicle. A 25-percent tariff on all automobile and parts imports would result in 2 million fewer U.S. vehicle sales, 715,000 fewer U.S. jobs and nearly $60 billion in lower U.S. economic output Aluminum and steel tariffs have had a significant impact on the automotive industry but the real threat is a potential 25% tariff on cars and parts imported from the Canada, Mexico and the EU. The industry is already feeling the effects of the tariff on Chinese goods instituted in July. Tariffs/Automotive proactiveworldwide.com Proactive Worldwide, Inc. 1699 E. Woodfield Road, Suite 406 Schaumburg, IL 60173, USA Jeff Mansfield, SVP, Consumer & Industrial Goods O: 847 483-7375 M: 630-220-4609 Jeffm@proactiveworldwide.com
    • 2. Companies Eff ect of Current Steel & Aluminum Tariff s Potential Eff ect of an Automotive Tariff • The tariff s have already resulted in $145 million in higher commodity costs for Ford. • Commodity costs could rise to as much as $600 million for the full year. • Ford will experience a 1% overall increase in cost for their F-series pickups that imports aluminum from Canada. • Tariff s on passenger vehicle produced in China may change Ford’s plans to produce their next generation focus in China. • Ford uses a large percentage of imported parts that would be eff ected by a 25% tariff . • GM turned a $2.4 billion profi t for the second quarter of 2018 but reported $300 million in increased commodity costs. • GM slashed its profi t outlook for FY2018 given the increased commodity costs. • Last year, about 36% of GM’s U.S. sales were of imported vehicles made outside the U.S., or about 1.1 million vehicles .  • A tariff on imported vehicle will have a signifi cant impact on the company’s bottom line as they are already feeling the eff ects of the tariff on Chinese goods with the Buick Envision. • The carmaker's current contracts for large steel purchases shield it from the impact of the duties through the end of 2018. • The company has incorporated into its 2019 outlook higher steel prices due to the 25 percent tariff . • Fiat Chrysler Automobiles is making plans to adjust its global manufacturing footprint as President Donald Trump’s threats over levies escalate. • A 25 percent tariff on imports would reduce FCA's profi ts by up to 743 million euros ($866 million) annually. • The company saw limited impact from steel and aluminum tariff s on its bottom line. • Toyota said the impact of U.S. steel and aluminum tariff s would reduce operating profi t by a little under $100 million. • Based on the roughly 709,000 vehicles Toyota exported to the United States from Japan in 2017, the automaker could take an annual tariff -related hit of $4.25 billion on those vehicles alone. proactiveworldwide.com Proactive Worldwide, Inc. 1699 E. Woodfi eld Road, Suite 406 Schaumburg, IL 60173, USA Jeff Mansfi eld, SVP, Consumer & Industrial Goods O: 847 483-7375 M: 630-220-4609 Jeff m@proactiveworldwide.com
    • 3. Ways that Proactive Can Help Proactive Worldwide specializes in market, customer, and competitive insights that provide the intelligence that will keep you informed and Out in Front of market developments. Find out how PWW can help you navigate sourcing, manufacturing and international trade challenges by: proactiveworldwide.com Proactive Worldwide, Inc. 1699 E. Woodfield Road, Suite 406 Schaumburg, IL 60173, USA Jeff Mansfield, SVP, Consumer & Industrial Goods O: 847 483-7375 M: 630-220-4609 Jeffm@proactiveworldwide.com Providing insight on how competitors are adapting to the new trade realities and what that means to your specific organization. Executing studies that identify threats to current manufacturing processes being affected by the trade war. Identifying opportunities that arise in the market as well as competitors’ strategies. Understanding how the market is being transformed and identifying the actions needed to adapt to new realities. By leveraging our automotive expertise, Proactive Worldwide can provide research and strategic analysis about potential or future threats and opportunities. 1 2 3 4


    • Previous
    • Next
    • f Fullscreen
    • esc Exit Fullscreen