Under a Trump Presidency, the NSX Might Become the Ultimate Bargain
When running for president, Donald Trump reached out to blue-collar rust-belt workers by campaigning on bringing manufacturing jobs back to the United States. One of the ways he appealed to those voters was by proposing a 35% import tax — on Ford specifically — on new vehicles brought into the country for sale. Of course he can’t punitively tax one company, but along with Congress they can tax all imported vehicles. Were such a law to pass, the Acura NSX becomes an even bigger performance deal.
Honda has a huge presence in Ohio, and the new NSX was developed, designed, and built in the Buckeye State. As a result, when an example of that car sells, it wouldn’t be subjected to the tax.
The Audi R8 coupe starts at $162,900, and would be considered close competition to the NSX with a starting price of $156,000. While the price difference is already a bit significant, it’s still a reasonable cross-shop. Adding on a 35% tax to the starting price of that vehicle, you get $219,915. Even with people with a lot of disposable income likely wouldn’t cross-shop that price difference.
An un-optioned Porsche 911 Carrera 4S currently has a retail price of $110,300. Tacking on the 35% tax would raise the price of the car to $148,905. That moves it into cross-shop range of the Acura, and I know what I’d pick. Also, base Porsches do tend to be lacking on a lot of options that you’d have to add on to reach the same equipment level of the NSX.
There is, of course, more to it than just tacking on a 35% price hike and calling it a day. Some manufacturers may choose to build a production facility in the United States if they feel they can sell at the volume needed to be profitable. Presumably there’d be tax incentives to do just that, and not just the avoiding of paying the punitive import tax. But those familiar with the Chicken Tax know how crippling legislation like that can be.
Should such a tax be implemented with President-elect Trump takes office in January, Honda will actually be in pretty good shape. The Accord, TLX, CR-V, RDX, ILX, and NSX are all built in Ohio alone. The Ridgeline and Pilot are built in Alabama. All of these vehicles, which are already quite competitive in their respective categories, would be in ever better shape if the competition’s vehicles suddenly became more expensive.
A lot of things would have to happen for such a law to take affect. I’m sure we all remember the episode of Schoolhouse Rock where it’s explained. If not, I’ve included it below.
It’s unclear yet how much of a point President-elect Trump will make this when he’s sworn in on January 20th, 2017 but it could potentially shake up the automotive industry as we know it. For Honda, they could be in a good situation to capitalize on it in a way the domestic automakers can’t.