Over half a million vehicles are produced in Mississippi every year, according to the Mississippi Development Authority. Automobile suppliers have also set up shop in the state. Three of the nation’s largest tire makers, Continental Tire, Yokohama Tire and Cooper Tire, also have a presence in Mississippi.
Corey Miller is Mississippi’s state economist. He says vehicle and transportation manufacturing make up about 3% of the state’s gross domestic product (GDP).
“So it's not a trivial sector of our economy,” he said.
He says tariffs will probably result in higher prices on cars, even American brands.
“Although some foreign manufacturers, such as Nissan and Toyota in Mississippi, produce cars in the US, every manufacturer produces, including domestic manufacturers such as General Motors and Ford, cars outside of the U.S. and bring them in into the U.S.,” Miller said.
John McKay is the president and CEO of the Mississippi Manufacturers Association. He says businesses that supply parts to the auto industry could also be impacted by tariffs.
“The plants that you see in Mississippi don't carry a lot of inventory on site,” McKay said. “So they require that these component parts be readily accessible. Well, if they're tariffs on all the parts, those suppliers, which are manufacturers themselves, could potentially be impacted.So you could see employment issues there.”
According to the Mississippi Automobile Dealership Association, there are 217 auto dealers in the state that employ nearly 19 thousand people.
Marty Milstead is the president of the Mississippi Automobile Dealer’s Association.
“I don't think there's a dealer in the state that's not concerned about what the impact is going to be for the costs going up,” he said. “Which means it's harder to put customers in vehicles.”
Milstead says Mississippi dealerships represent over 30 brands of imported and domestic vehicles. He believes consumers won’t likely immediately see a rise in prices for new vehicles that have been in a dealership’s inventory. However, Milstead says in the long term, customers may begin to feel the effect of tariffs.
“I think we can expect to see increases in the thousands of dollars, not hundreds of dollars,” he said. “Obviously for anybody that's looking at monthly payments and affordability, that's a big concern.”
Other experts believe the impact of auto tariffs could be far less. Maximillian Littlejohn is an economics professor at Millsaps College in Jackson.
“We already have a lot of infrastructure in place for producing cars,” he said. “So I don't think the increase on the price tag at the end of the day that the consumers are going to see is going to be as dramatic as some make it out to be.”
Littlejohn believes investing in existing American manufacturing could potentially reduce costs.
“Some of the manufacturers that already have plants here, I mean, in theory, they could just ramp up some more production,” he said. “Yeah, it's a little more expensive than it was before. But, you know, is it 25% more expensive? Or maybe it was just 5% more expensive and now it makes sense to do that.”
Littlejohn also emphasized that it is unclear how long the auto tariffs could last, adding that the potential impact on consumers and businesses depends on the longevity of the levies.
