Widespread tariffs introduced by US president Donald Trump this week, including a 25 per cent tax on imported cars and parts, could trigger global recession, warns one local executive.

“Everybody is affected by Trump’s tariffs, no matter where you are in the world,” said Glen Smith, managing director of Auto Solutions on St John’s Road in Pembroke. “America sneezes and Bermuda catches one heck of a cold. Nobody is going to escape anything, at the end of the day.”

Company sales and operations manager Harry Andrews said they were trying to stay as informed as possible.

“Glen has made a couple calls this morning to our direct counterparts in the US,” he said. “We have gotten some bulletins out of what has happened.”

So far the news has been reassuring.

“Our cars come through the US and are kept in a bonded facility in Port Elizabeth, New Jersey,” Mr Smith said. “They literally cross the road and are then put on the Oleander to Bermuda. The warehouses are in a free-trade zone.”

However, Trump’s taxes on Chinese-made container ships could hit Auto Solutions, since they use the vessel Oleander to transport cars to Bermuda. The ship was launched from the Yangzijiang shipyard in China in 2018.

John Wight, a Bermuda shipping line representative, testified this week before US trade officials that fees targeting ships such as the Oleander represent an “existential threat” to the island.

Most of the island’s food supply comes in on the Oleander.

“I gather that ships built in China are being charged $1.5 million every time the ship goes into an American port,” Mr Smith said. “That is just not sustainable. That is our biggest worry for Bermuda.”

His hope was that container ships built before 2024 would be grandfathered in.

“I believe that Mr Trump’s bigger plan is to produce car ships in the US,” Mr Smith said. “However, you cannot just flip a switch and build ships. Even building the factories would take time.”

The idea of imposing a tax on Chinese-built ships until the US could set up its own shipbuilding industry was suggested during the Biden Administration.

In January, Vincent Clerc, the chief executive of Maersk, the second biggest container shipping firm in the world, said 70 per cent of the world’s shipbuilding capacity is in China.

Speaking at the “Demystifying Industrialised Policy” forum in Davos, Switzerland, Mr Clerc said it would take at least six or seven years before the US could produce its first container ship.

Mr Andrews said if the Oleander does cease to be viable for Auto Solutions, they will use the car ferry like other local auto dealers.

“We prefer the way we do it, though,” Mr Andrews said. “It is a competitive advantage for us because it allows us to reduce our lead times.”

Auto outlets were taking a wait-and-see approach because of the changes in policy.

One manager said: “Things are rolled out, then scaled back. Once everything is in place, we will have a better idea of how it will impact us. It will not affect anything we already have in stock. When we know the result, we will let our customers know.”

Jeffrey Cook, general manager at Hamilton garage and parts dealer Weir Enterprises, said most of their parts come from Japan via Britain.

“We do not know yet what impact Trump’s tariffs will have on us,” Mr Cook said.

Their parts are generally sent from Britain to New Jersey and then shipped to Bermuda on the Oleander.

“We do get some parts out of the US, but our suppliers have not indicated any changes yet,” he said. “We are expecting something, but it is a matter of wait and see.”

Weir Enterprises usually use US suppliers when their British sources are out of a particular part.

If push came to shove, and the part was dramatically more expensive because of the tariffs, he was willing to drop their US emergency supplier, and find one somewhere else.

“That would not bother us, too much,” Mr Cook said.