For now Hyundai cars are not subject to tariffs. If so, its mid-price car would sell for less than its direct competition who have to pay a tariff.
Joe said the real effect of tariffs would show up on less expensive cars.
We go to the next question here. Judy asks, I’m hoping for the best, but expecting the worst. If the administration goes ahead with its planned 25% tariffs on Canadian and Mexican auto parts, can you indicate if the retail price of the SPD pipeline vehicles will be affected? No, I don’t expect that this is going to have a meaningful impact on our revenues based on these tariffs. And thanks for the question, Judy. First, that as a former economist at the US Central Bank in the 1980s, my personal view is that free trade is usually the best solution. However, that only works when there’s a level playing field. And I think the tariffs are meant to create that, as well as address border security and the flow of fentanyl into The United States.
My guess is that if these other countries handle the border security and fentanyl issues, the tariffs will revert back to where they were. And to answer your specific question, I don’t believe that these tariffs will have a significant impact on our automotive and other business.
Over the past few decades, there have been high import duties in some areas of the world on cars, for example, and that market typically is not affected mostly in the premium car area. So tariffs will have an effect, we believe, on less expensive cars that are more price sensitive. But I do not believe that it will affect our business or our revenues meaningfully.
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