The tariffs imposed by the U.S. on automobile imports do not seem to be resulting in a revival of the American economy, as U.S. industrial production fell more than expected in April, pressured by a sharp decline in automobile production, a sector that may face difficulties in recovering in the second quarter due to the tariffs.
According to the U.S. Federal Reserve (Fed), released this Thursday, industrial production fell by 0.4% last month, following a revised gain of 0.4% in March. Economists surveyed by “Reuters” had predicted a 0.2% decline in production, after a previously reported increase of 0.3%.
However, compared to the same period in 2024, industrial production increased by 1.2% in April. The change in tariff policy by President Donald Trump is seen as a significant obstacle for the industry, which represents 10.2% of the economy and relies heavily on imported raw materials.
Although the U.S. administration reduced the rates on Chinese imports from 145% to 30% last weekend, a 10% tariff on nearly all imports remains in effect, along with a 25% tax on steel and aluminum, as well as automobiles and parts.
Automobile and parts production fell by 1.9% last month, following increases in the previous two months, likely due to manufacturers’ attempts to anticipate the tariffs. Automakers have already warned that the tariffs will significantly reduce profits this year.
