Smart Announces Price Hike Due to Tariffs on Electric Cars
Smart, the electric vehicle manufacturer, is set to increase prices for its Smart#1 and Smart#3 models by approximately 2,000 euros gross starting January 2025. This decision comes in response to punitive tariffs imposed on imports from China, where Smart's vehicles are manufactured. The tariffs, which amount to 28.8% when combined with existing customs duties, have significantly raised the cost of importing these electric cars into Europe. CEO Dirk Adelmann expressed hope that political changes in the U.S., particularly with Donald Trump's return to the White House, may lead to a resolution of the trade conflict between China and the EU. However, for now, consumers will bear the brunt of these increased costs.
The tariffs were introduced as part of a broader strategy to protect European electric vehicle manufacturers, but Adelmann criticized this approach, suggesting it could stifle the growth of electric mobility in Europe. He indicated that Smart is also exploring options to relocate some production outside of China to mitigate the impact of these tariffs, potentially collaborating with European manufacturers for assembly.
Potential Price Increases on Mexican Imports Due to Trump's Tariffs
Meanwhile, in the U.S., the agricultural sector is bracing for potential price hikes on fresh fruits, vegetables, and beer imported from Mexico. President-elect Donald Trump has threatened to impose a 25% tariff on all products crossing the southern border, which could significantly impact American consumers. Mexico is the largest supplier of fresh produce to the U.S., accounting for 69% of vegetable imports and 51% of fruit imports as of 2022. Popular items such as tomatoes, avocados, and beer brands like Corona and Modelo could see price increases as a result of these tariffs.
Economists warn that such tariffs could reignite inflation, with projections suggesting an increase of around 1%. Retail giants like Walmart are preparing for these potential price increases, indicating that while they strive to maintain low prices, consumers may ultimately face higher costs due to the tariffs. Trump's tariff proposals, while seen by some as negotiating tactics, are raising concerns about their long-term implications for the U.S. economy and consumer prices.
