Global auto sales are on the rise, but protectionist measures in the United States may be a wet blanket.
Scotiabank Economist Juan Manuel Herrera made the warning in the 2018 Global Auto Report.
“The growth in sales thus far in 2018 has, as expected, been led by strong gains in developing economies while a number of advanced economies have reached sales plateau, albeit near record levels,” said Juan Manuel Herrera. “The global economy remains solid amid a mutually reinforcing expansion brought about by rising trade flows across the world. An escalation of U.S. protectionism, however, threatens to slow the pace of global growth.”
Canadian sales have slowed enough to the point of now falling behind last year’s record pace. Scotiabank reported the country is 1.7 per cent behind last year’s pace. Canada has seen sales declines in Western (down 1.1 per cent) and Atlantic Canada (down 7.7 per cent), but seen “a slight increase” in Central Canada.
U.S. President Donald Trump has threatened to slap tariffs on vehicles imported to the U.S. Scotiabank expects “tit-for-tat retaliatory measures by affected nations”
The impact on the Detroit Three automakers will likely be minimal so long as NAFTA remains in place in a duty-free manner.
“But, an import tariff imposed on foreign autos from Canada and Mexico would impact a much larger swath of vehicles sold in the US, and would seriously hurt the Detroit Three firms,” Scotiabank said.