Chicken Tax 2.0: Bank Of America Flags 3 Million Sales At Risk After Auto Tariffs

President Donald Trump‘s 25% tariffs on auto imports could threaten to upend the entire U.S. automotive industry.

How? According to Bank of America, car prices will be higher, and millions of unit sales could be wiped out.

In a report titled “Chicken Tax 2.0 Goes Whole Hog,” released on Thursday, analyst John Murphy, CFA, said the 25% tariff announced by Trump earlier this week could disrupt the sale of 2.5 million to 3.2 million vehicles annually, or up to 20% of the total U.S. auto market.

See Also: Inflation Will Accelerate In Coming Months’ If April 2 Tariffs Take Effect, Economist Warns

Why A Chicken Tax 2.0?

The new auto tariffs revive and expand the logic of the original 1960s-era "chicken tax", a 25% duty initially imposed on light trucks in retaliation for a European tax on American poultry.

Trump's latest version applies a 25% tariff on imported cars, light trucks, and key auto parts. It also includes engines, transmissions, and electrical components. The new rules take effect April 3 and will be applied on top of upcoming “reciprocal tariffs.”

The White House clarified that vehicles and parts that meet United States-Mexico-Canada Agreement ...