Toyota dealers around the U.S. could soon take a big financial hit if President Trump’s proposed new tariff on Mexican imports becomes reality.

Bob Carter, who is the North American Sales Chief for the auto manufacturer, told its American dealerships in an email this week that they could expect to pay anywhere from $215 million to $1.07 billion as a direct result of the Mexico tariff President Trump announced late last week. The bulk of that likely comes from the importing of the Toyota Tacoma pickup truck. Reuters reported that 65% of the Tacoma trucks that Toyota plans to sell in the U.S. are manufactured in Baja, Mexico.

Trump announced his intention to impose the new 5% tariff on all goods imported from Mexico last week as a means of punishing Mexico for the wave of undocumented immigrants and asylum-seekers crossing the border.

“As everyone knows, the United States of America has been invaded by hundreds of thousands of people coming through Mexico and entering our country illegally,” Trump wrote in an official White House statement. “This sustained influx of illegal aliens has profound consequences on every aspect of our national life—overwhelming our schools, overcrowding our hospitals, draining our welfare system, and causing untold amounts of crime.”

However, the new tariff would likely be passed onto consumers in the form of higher prices. The Tax Foundation — a non-partisan think tank established in 1937 — said the new tariff would amount to the biggest tax increase on Americans since a 1993 tax bill former President Bill Clinton signed into law in the first year of his administration.

“Tariffs can raise the cost of parts and materials, which would raise the price of goods using those inputs and reduce private sector output. This would result in lower incomes for both owners of capital and workers,” the Tax Foundation wrote on its website.

If the tariff goes into effect as planned on June 10, Toyota may end up raising prices on car buyers, as dealers contend with higher costs from importing from suppliers. And they may not be the only company to raise prices — restaurant chain Chipotle already announced it would increase its prices on its food, as it imports avocados, beer, and tequila from Mexico.


Carl Gibson is a politics contributor for Grit Post. His work has previously been published in The Guardian, The Washington Post, The Houston Chronicle, Al-Jazeera America, and NPR, among others. Follow him on Twitter @crgibs or send him an email at carl at gritpost dot com.

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