Trump tariffs

[Cruisertrash]

WSJ this morning, chess in another dimension:
When President Trump convened CEOs of some of the country’s top automakers for a call earlier this month, he issued a warning: They better not raise car prices because of tariffs.
Trump told the executives that the White House would look unfavorably on such a move, leaving some of them rattled and worried they would face punishment if they increased prices, people with knowledge of the call said.
Instead, Trump said, they should be grateful for his elimination of what he called former President Joe Biden’s electric-vehicle mandate, which involved subsidies and emissions requirements to encourage electric-car production. He made a lengthy pitch for how they would actually benefit from tariffs, two people on the call said, adding that he was bringing manufacturing back to the U.S. and was better for their industry than previous presidents.

I wonder if the domestic automaker CEOs believed that pitch.

Interestingly I saw a tweet from Mr. Musk yesterday - a screenshot anyway, I’m not on Twitter. He said a lot of Tesla parts come from overseas and his business will be impacted by increased costs due to tariffs. From the get-go these tariffs were pitched as having no effect on consumers, that other countries were going to be paying the cost. I wonder why Musk is off-message here.

 

[DanInDenver]

Believe him about the cost to them, no. Their lobby group has said it will cost them billions.

About the threats I think so. Tesla commercial on the White House drive and another law firm gone after via exec order make the threats real.

 

[shellb]

Slightly better news this morning. The language in the official order calls for parts tariffs to start May 3 not April 3 like vehicles. There’s still a lot of confusion but expect that to get sorted out soon.

 

[shellb]

crap @Notyourmomslx450 we forgot to order my truck parts last night!

You should have time now!

 

[RayRay27]

This is interesting to me and I'm not sure if this was brought up previously by someone else but I just read an article in fortune that Trump can't unilaterally impose tariffs on cars unless it's considered a national security threat. There is a legal loop hole, isn't there always, in section 232 of the constitution that states congress shall be the ones to impose tariffs unless it's deemed a national security issue by the president.

From Fortune:

How did Trump manage to impose such steep tariffs unilaterally? The administration availed itself of a legal loophole.

“Automobiles and certain automobile parts are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States,” the White House said, adding that the U.S. share of global auto production has stagnated over the past six years.

Arguing that foreign cars that cross the border somehow pose a danger to the world’s richest and most powerful country is not an obvious argument for many. Without it, however, Trump would need Congress to implement the tariffs, since the Constitution places responsibility for tariffs and trade under the purview of the legislative branch of government.

The only exception to the rule is Section 232, which allows the executive to restrict imports strictly when there is a national security theat.

Trump’s solution is to argue that countries like Australia, which imports all of its motor vehicles after the last domestic production site closed in late 2017, are strategically vulnerable due to the loss of a portion of its heavy industry.

“Only about half of the vehicles sold in the United States are manufactured domestically, a decline that jeopardizes our domestic industrial base and national security,” the White House said.

There you go everyone, there's your bullshit factor. We're imposing tariffs because it's a national security issue. You're welcome!

Trump warns U.S. carmakers not to take advantage of tariffs by hiking prices on consumers

The Trump administration believes auto execs could be tempted to use the tariffs as cover to push through their own hefty price hikes without risking the competitiveness of their U.S.-built vehicles.

www.yahoo.com

 

[nakman]

Trump's 25 percent tariffs on imported cars and parts could impact classic cars, too - Magneto

Classic cars and parts will be subject to a 25% import duties unless exemptions are quickly made to Trump's sweeping tariffs.

www.magnetomagazine.com

 

[IoN6]

Funny anyone thinks they have to be told they cannot pass those prices on to consumers. Of course they will not, because the consumer is not going to be able to afford a 25% price hike. Sure it will result in some incremental price increase, but no where even in the same universe as 25%. Same goes for any good. Some goods will see close to or even 25% increases. Because their markets can and will absorb that cost.

 

[gungriffin]

Funny anyone thinks they have to be told they cannot pass those prices on to consumers. Of course they will not, because the consumer is not going to be able to afford a 25% price hike. Sure it will result in some incremental price increase, but no where even in the same universe as 25%. Same goes for any good. Some goods will see close to or even 25% increases. Because their markets can and will absorb that cost.

There aren't 25% profit margins on cars though. How will the manufacturers be able to absorb the fee? I read that many manufacturers are looking to spread the 25% fee evenly over all cars they sell including the ones produced in the US.

One interesting item that I hadn't considered is the 25% fee is on the import price and not the MSRP of the vehicle. It won't make a huge difference, but it will make a small one.

 

[DanInDenver]

What I have seen are guesstimates of $6-10k increases in new car prices.
Also an assumption that as buyers drop out of the new market and into used consideration the used car prices will also increase.
The tariffs will create inflationary pressure on prices of autos new, used and parts.

 

[gungriffin]

What I have seen are guesstimates of $6-10k increases in new car prices.
Also an assumption that as buyers drop out of the new market and into used consideration the used car prices will also increase.
The tariffs will create inflationary pressure on prices of autos new, used and parts.

Exactly this. Also, what happens when the effected countries enact their own retaliatory tariffs?...

One other concern I have begun to think about is what unwinding something like this would look like. Imagine in 4 years that the next Pres uses the power of a pen to undo all of this and now everything is less expensive again overnight.

 

[Cruisertrash]

A tangible example:

I have a new 60 Series product that I’ve been developing for about 18 months. It’s not a complicated thing, it just keeps getting shoved to the back burner. I’m finally getting close though.

About a year ago I logged all the costs for the constituent materials in my spreadsheet where I track that stuff so that I can generate a final sale price for each product. I did so about two months ago as well, updating prices where necessary. I did it again last night as I’m getting close to releasing this thing and wanted to hone the price in further. And holy crap…

~18% total cost increase. Obviously that wasn’t from every single piece, but it was from a significant number of them - about half. As stated above I try to source US materials where I’m able. This product uses some materials where there is zero US manufacturing fwiw. Even a US fabrication shop that I use for a metal bracket, though, that cost went up about 28%.

I had originally calculated a final sale price from materials, labor, and a modest margin. My materials cost alone now supersedes that. Now I recalculate and wonder if the market will support the new higher price. And if the market doesn’t support the price - which we’ll find out after launch - why stay in business? This is supposed to be a fun side gig that makes me some extra money and provides a few cool parts for 60 Series owners. It may not be worth my time anymore.

It’s not complicated to figure out how it works either: the foreign manufacturer has to pay tariffs so they raise their price to cover that. The domestic supplier stocking the materials pays that increase. They in turn pass the increased price on to me. I have to pass that increase on to customers otherwise there’s no margin and no point for me to be doing this. Now, at each step these players aren’t passing on the exact cost of the tariffs: each player might absorb a little bit of that if they’re able. But there’s still a net increase to the end consumer.

I’m not going to increase my prices because I’m being told to do so. I’ll be increasing them because I have to - or I’ll get out of the game. Whether the consumer can choke down such cost increases over a wide swath of goods remains to be seen. I don’t know the ability for other industries to absorb the increases, and I don’t know to what degree necessary goods like food, clothing, etc, will be affected. Discretionary stuff like aftermarket truck upgrades/parts will probably see a decline first I imagine.

Anyway, that’s how it’s working in my world right now.

 

[Cruisertrash]

I use Mouser as an electronics supplier. They're huge and supply to big industry players, OEMs, etc. I'm just a small fry but they're still a great resource for me. About a month ago I was ordering some parts and noticed that they actually put a disclaimer on each part if it was going to be affected by tariffs. They've since done away with that and have a blanket statement kind of buried on their site now. I think seeing "this part might be affected by tariffs" on so many line items must have spooked people, because it's gone now. I didn't think to get a photo of it, but I found one on the web:

Again, I did not take this screenshot and these are not parts I was looking for - but it's exactly what I saw. I wonder if instead of that disclaimer and a price adjustment on the checkout side of things, if they've now just rolled that into the front-facing prices. But yeah, this is real, tangible stuff.

 

[Notyourmomslx450]

just when used car prices where calming down....

 

[Cruisertrash]

just when used car prices where calming down....

Right? Might see Covid Prices 2.0.

But who knows. The future is unwritten. We just gotta see how it all plays out. Troubling signs so far, but maybe things take a different course.

 

[AlpineAccess]

Right? Might see Covid Prices 2.0.

But who knows. The future is unwritten. We just gotta see how it all plays out. Troubling signs so far, but maybe things take a different course.

Inflation 2.0 brought to you by Carl's JR

 

[RayRay27]

just when used car prices where calming down....

This might be the only bright spot for me personally out of this whole tariffs issue. Ever since I bought my 2023 Tundra it has been the biggest pain in my ass. Because it needs a replacement engine and has multiple recalls, I have tried to trade it in for a new or newer model. The best offer I could get was 37K for a two year old Tundra with only 16K in milage. That's a 20k dollar it. I am so upside down right now because the truck needs an engine, increased tariffs might be the only thing that saves my ass.

 

[Cruisertrash]

Inflation 2.0 brought to you by Carl's JR

Carl’s Jr: Fu$k you, I’m eating!

-from the documentary Idiocracy

 

[IoN6]

Exactly this. Also, what happens when the effected countries enact their own retaliatory tariffs?...

You mean, like the ones they already have on goods coming from our country?

 

[gr8fulabe]

You mean, like the ones they already have on goods coming from our country?

Although not wholly exact, this really is mostly untrue. It’s just shy of propaganda, being used by Trump to sell his agenda.

 

[RayRay27]

I hope everyone is ready for our new national holiday on April 2nd. Better hurry and get to Walmart so you can get your new liberation day flags and shirts.

Per CNN:
Trump plans to announce additional tariffs on Wednesday, which he has dubbed “Liberation Day,” on all manner of imported goods as retaliation for what he sees as unfair barriers to US exports to other countries. Trump has already announced tariffs on all goods from China, Mexico and Canada, and this week a 25% tariff on all imported cars is set to take effect.

At least we're getting a 6 trillion dollar tax break over the next 10 years.

White House aide Peter Navarro said Sunday that he expects President Donald Trump’s tariffs to bring in $6 trillion in revenue in the next decade, which could amount to the largest tax hike in US history.

Even when adjusting for inflation, that amount would be triple the tax increase put in place in 1942 to pay the cost of fighting World War II.

Navarro, Trump’s senior counselor for trade and manufacturing, insists it’s not a tax increase but a tax cut — echoing the Trump administration’s repeated belief that tariffs will be paid not by American consumers but by businesses in other countries or the countries themselves.

“The message is that tariffs are tax cuts, tariffs are jobs, tariffs are national security,” Navarro said on Fox News Sunday. “Tariffs are great for America. They will make America great again.”

The non-auto tariffs alone “are going to raise about $600 billion (a year), about $6 trillion over a 10-year period,” Navarro said. Cars, he said, would add another $100 billion annually.

It’s not clear how Navarro calculated this $700 billion annual figure, since the details of these tariffs have yet to be fully disclosed. It’s also not clear, and perhaps unlikely, that Americans will continue to buy as many imported goods if prices are hiked due to the cost of the tariffs.

https://www.cnn.com/2025/03/31/economy/tariffs-largest-tax-hike/index.html