Blatantly false. Japan and Korea don’t tariff american autos, at all. The EU does at 10% (which I agree is wrong and should be reciprocal), but nothing as egregious as you describe.
All you have to do is read about the after-effects of the Smoot-Hawley Tariffs to see what will come next. Except now, far more than in 1930, supply chains are interconnected, and the world is more global. Make no mistake, if this sticks, it puts us and the rest of the world, into immediate recession (or worse). Further, it makes American exports, both in terms of goods and services, toxic. What foreign consumer or company would ever buy American again? Who would buy Deere tractors or CAT excavators when you have no certainty with warranty / parts? Who would utilize american accounting, banking, advisory services when you can’t be sure of the motives behind said services? Who would ever buy another American car (btw tesla is now absolutely cooked - it’s dead to any EV buyer outside the US, and more than half of the US population won’t touch it, at any price)?
Ultimately, consumers and businesses like certainty, above all else. They spend money in environments where they feel secure. So much economic activity happens as a result. If you have to keep businesses and consumers guessing as to what comes next, you’ll find yourself broke pretty quickly.
Value point except that isn’t how the free market works. Chip manufacturing is something we definitely need to have domestic capacity for. But it’s gonna be decades, if ever, before those chips are competitive from ones sold by Taiwan. As @DailyDriven mentions, no publicly owned or even PE owned company is going to be willing to absorb this pain. As such the government must decide where to put its thumb for things with national interest. For things like chips with many years lead time, I think the government needs to assure a supply. A historical analogy I’d draw is the British subsidizing private companies to build certain classes of ships in the 19th and 20th century. If there was peace, the shipping company would come out way ahead. If war, the ships would be bought out over by the Royal Navy. It was expensive and messed with the free market but somehow you have to figure out the most economical way to assure the availability of long lead time items (available shipping tonnage) for national defense.
I have said it in previous threads and I’ll say it again.
Lawyers. Lots and lots of lawyers fighting with the DoJ and customs over the value of imported parts. Especially for vehicle parts this almost seems like an example of a difficult to enforce tax from my law school law and economics class. Companies will figure out what to do to make the value of the imported part as low as possible.
I’m in no position of support for this tariff, unnecessary as mentioned by everybody above, but I think there’s a possibility that as soon as foreign automakers demonstrate interest in building here such as buying land, their current imported products can become exempt from the tariff immediately. I’m hoping this tariff will be gone next week and the idea of Bentleys being built in South Dakota will not become reality.
Gonna say that making a tens of thousands of dollars decision on a whimsical government decision which can and likely be reversed at any time is not a great move
It’s also unclear how immediately OEMs would respond to this
I dont think were decades away from chip manufacturing. I think the show of force at the inauguration was enough to see the billionaires are getting on board and money makes things move quickly. Just the building of the infrastructure alone will bring high paying skilled labor jobs back to the market.
I also believe because I have inside baseball knowledge that many of these moves are as strategic as placing your naval fleet just outside of another countries boundaries. This is a calling to the world that we are no longer the peace keeper, neighbor next door when you need sugar. We will be run as a business, we will produce what we need and export materials, Fossil fuels, AI, Tech…If your dollar is valued higher then the rest of the world do you care about export tariffs?
My friends up in Canada pay huge percentages more for the same vehicle and yes there are some complaints but for the most part they still afford it…How?
Well there is a reason we sent all of the manufacturing abroad. TSMC’s been trying to bring it to Arizona and that’s been marred with cost over runs, issues with finding skilled labor to their standards (more like them finding american labor too expensive, and fighting the construction unions for alleged shoddy work), and so forth - for a high tech factory that’s not even going to make their latest and greatest semi-conductors.
Last I heard they are still chartering flights in for Taiwanese citizens and their families to get the bloody thing online, America wasn’t chosen as a factory site because of it’s economic prowess or labor skill, but because it represent an ultimate security hedge in their overall strategy.
4x is bad enough. Add the sales tax countries impose on top of their duties and yes, it is egregious in my mind. Germany charges 10% duties + 19% sales tax. Total cost to the German consumer is 29%. That is a far cry from 2.5% + 6% (average local sales tax) in the States.
Remember the 25% tariff is on the cost coming in not on the MSRP. Also the manufacturer will inevitably eat some % of it especially given the consumer is currently tapped. So still bad but not as simple as folks are making it.
This is all very interesting but realistically, it’s end of March, quarter and now with tariffs on the horizon, what are the dealers thinking? Are they trying to offload inventory asap and more likely to do a deal this week? I know that’s a vague statement but trying to figure if they are gonna hold onto existing inventory as they expect prices to go up, or getting rid of it to make sales before tariffs. I had been looking at infinity recently anyways and in a no rush position to hard ball if needed.
Same here. My lease ends in May and I was anyways in market for a second car. Any insights on the above would help to decide if I should pull the trigger this weekend. I am looking at Audi etron GT and maybe q8 etron
Sales tax (VAT) is paid by German consumers on ALL purchased cars, not just ones imported from the US. It includes German cars, as well. Your point is moot - it’s not on us to dictate how countries tax goods and services.
I think it’s easy to have an opinion on this from a political point of view. I, as a republican voter, (note: republican, NOT MAGA), believe in free trade and low trade barriers. I believe in economic certainty because it encourages both economic activity and free enterprise. This is the exact opposite. It stifles global trade, while making American exports that much more toxic to foreign buyers. This is also no way to treat friendly countries, many of whom legitimately subscribe to the post-war world order that we created. Global trade grew BECAUSE of pax americana. For us to pull the rug out from friendly countries and do this - that will have severe economic consequences that the administration, in its haphazard approach, did not foresee.
You, on the other hand, seem to think that we have been “wronged” economically by a host of allied countries. That manufacturing has declined in this country as a result of globalization (blatantly wrong, but ok). There’s a lot of resentment in your tone, and that’s fine, but you also don’t really have a leg to stand on while arguing that this is the correct approach when dealing with friendly countries. You want to try to strong arm china? By all means. China is not the same thing, as, say, Japan, Korea, or the EU.
These are just my two cents. Remember, I’m a “washed out CPA” or something, turned stupid / lowly car salesperson, so all I really know how to do is ask “what are you looking to accomplish today and what are your goals today?”
I am looking at Audi etron GT and maybe q8 etron