Donald Trump’s bombshell announcement that the US will slap a 25% tariff on imported automobiles is an “act of economic self-sabotage” dressed up as industrial strategy.
This is the stark analysis from Nigel Green, CEO of global financial advisory giant deVere Group, after the US President on Wednesday said he will put a 25% levy on foreign autos imported, escalating his administration’s use of aggressive trade measures in an effort to boost domestic manufacturers.
The deVere chief executive says: “The move, aimed at turbocharging domestic car manufacturing, will almost certainly backfire.
“It will dent consumer confidence and slow US growth — and it will impact the global economy, compromising America’s credibility as a trading partner.
The policy, confirmed Wednesday afternoon, sent Wall Street into a tailspin, with the S&P 500 plunging 1.2% shortly after the announcement.
“While the president claimed this will ‘spur growth like you haven’t seen before, investors see the opposite. Tariffs raise prices. They reduce choice. They stunt demand,” notes Nigel Green.
The White House appears to have misread the economic mood. While inflation has eased, American families are still recovering from years of elevated prices.
“These tariffs won’t just hit Germany or Japan. They’ll hit middle-class Americans.”
Europe and Asia, home to some of the largest exporters of cars to the US, believes deVere Group, are unlikely to take this lying down. “Retaliatory tariffs are virtually guaranteed.”
This isn’t a policy with a long-term growth horizon. It’s economic nationalism “with a boomerang.” Foreign automakers might decide that the US market just isn’t worth the hassle.
“None of this leads to more jobs or better wages. It leads to sluggish sales, costlier credit, and potential layoffs — exactly what a fragile economy doesn’t need.”
The goal of reviving American industry is a noble one. But this isn’t revival. It’s regression.
“Tariffs won’t drive carmakers home. They’ll drive prices up, relationships down, and America’s global standing into reverse,” concludes Nigel Green.
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of offices around the world, more than 80,000 clients, and $14bn under advisement.
