Automotive Sector Faces Decline in Manufacturing Output Due to Tariffs

The automotive sector saw a decrease in manufacturing output last month, and could struggle to climb back up due to tariffs, according to Reuters.

Factory output fell by 0.4%, following an upwardly revised 0.4% gain in March. Reuters also polled economists who predicted a 0.2% decline, after having previously estimated a 0.3% rise.

Motor vehicle and parts output had been increasing in the past two months, and in April was up by 1.2% year-over-year—but last month also saw a 1.9% drop in motor vehicle and parts output.

With many tariffs remaining in place—including a 30% tariff on Chinese imports, 10% tariff on nearly all imports, 25% tax on steel and aluminum, and tariffs on motor vehicles and parts—and production heavily relying on imported raw materials, this decline may be difficult for the industry to make up for in the coming months.