Maryland Gov. Wes Moore says his administration is bracing for the impact President Donald Trump’s recently announced 25% tariffs on cars will have on the Port of Baltimore.
The White House says the tariffs will take effect on April 2 and will cover passenger vehicles and light trucks, as well as parts such as engines and transmissions.
The Port of Baltimore typically handles more cars and light trucks than any other port in the country. Following the collapse of the Francis Scott Key Bridge, the port dropped to second-ranked last year but still handled roughly 750,000 vehicles, about 85% of which were imports, according to Maryland Port Administration spokesman Richard Scher.
“Whether you're getting your car from X country or Y country, whether it's on its way to Michigan or on its way to Hagerstown, it probably came through the Port of Baltimore,” Moore told reporters Thursday.
He said his administration is working to determine what sort of fiscal impact the tariffs will likely have on the Port of Baltimore and on the state.
According to Tinglong Dai, a professor at the Johns Hopkins Carey School of Business and an expert in global supply chains, about $20 billion worth of vehicles are imported through Baltimore’s port. He said the largest number of those vehicles come from Germany.
The biggest impact of the tariffs, Dai said, comes from increased uncertainty and damaged confidence by businesses linked to the auto import industry.
“You’re talking about tens of thousands of people. You’re talking about hundreds of millions of dollars of tax revenue,” Dai said. “The damage will be devastating.”
The countries whose vehicles are being taxed are also likely to retaliate with their own tariffs, he said. For example, Germany may decide to levy a 25% tariff on Baltimore’s largest export, coal.
The tariffs will have wide-reaching ripple effects, said JP Krahel, an accounting professor at Loyola University Maryland’s Sellinger School of Business and Management.
“If these tariffs add a 25% markup on either the whole car or its major, cost-increasing parts, then that's going to mean fewer people are going to be buying cars, which means probably one of the first impacts you'll see is that there are going to be fewer cars imported, because those importing them know that they're going to cut down their sales numbers,” Krahel said.
Fewer cars will be imported and sold, which drives down commerce and sales tax revenue, he said. It’s also unclear whether the tariffs will apply to farm equipment, but if they do, they will increase food prices.
“A tariff is never something that exists in isolation,” Krahel said. “Anytime prices rise on one thing, it’s going to have [downstream] effects on related industries, related people.”
