How are auto makers going to handle tariffs?

[Mach1E]

From everything I've been reading, we simply don't know yet. The devil is in the details. Will tariffs go into effect immediately? Will they be threatened, put into place for two days, then lifted? Will there be an exception for American car companies building things in Mexico and Canada? Will there be a grace period for Ford, GM, and Stellantis if they promise to move as many factories as possible to the US within a certain time frame? I'm sure there are lots and lots of companies and lobbyists making their case for different parameters to any tariffs. Ultimately it's a lot of uncertainty.

Definitely a lot of uncertainty.

Unfortunately uncertainty is an excuse for the news and the internet to jump to conclusions about all of the worst possible outcomes.

My guess?
They’ll be shortlived.

The excuse being used for the tariffs has nothing to do with tariffs. It’s drug trafficking and illegal immigration.

If these tariffs were being put in place for some long term economic reason, I wouldn’t be more convinced they’ll be long term.

Time will tell.

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[MachhE-CT]

If orange man say thing, thing is probably not true.

Maybe occasionally he says something is true but he has lied so many times that I don’t believe anything he says .

 

[SonicBlue]

The point is that it IS hard. It would take lots of work to figure out how to do it without hurting American consumers. Fact is, NO ONE IS DOING THAT WORK. These are "shoot-from-the-hip" tariffs that everyone who voted for him seem to love. Without planning for the many possible eventualities, these tariffs will hurt American consumers. Stop patronizing the folks having a legit conversation here. You're not adding anything constructive.

Neither is anyone here. It’s just tribal naysaying. It’s easy to do that. If you enjoy it, go for it.

 

[dbsb3233]

I would guess dealers have been stockpiling imports leading up to this. And that Ford will stop most shipping and let them pile up at the Mexico factory for a while hoping this ends soon.

Factories shut down for weeks periodically anyway. Similar thing. Dealer inventory can carry them for a while.

 

[Snakebitten]

Still waiting on the build date for a 2025 Maverick Hybrid AWD. It'll be interesting to see what happens to the MSRP from the order date a few weeks back.

 

[DennisD]

Definitely a lot of uncertainty.

Unfortunately uncertainty is an excuse for the news and the internet to jump to conclusions about all of the worst possible outcomes.

My guess?
They’ll be shortlived.

The excuse being used for the tariffs has nothing to do with tariffs. It’s drug trafficking and illegal immigration.

If these tariffs were being put in place for some long term economic reason, I wouldn’t be more convinced they’ll be long term.

Time will tell.

I hope you are correct.

Warren Buffet suggests that this is an act of War economically. Not sure if the "little guy" will be able to sacrifice economically of what will happen to their pocketbook but many of them sure seem to be optimistic though.

Like most Wars, no one wins. I am afraid this will not end "good" but like you stated, time will tell.

 

[4sallypat]

.....
They’ll be shortlived.

The excuse being used for the tariffs has nothing to do with tariffs. It’s drug trafficking and illegal immigration.

If these tariffs were being put in place for some long term economic reason, I wouldn’t be more convinced they’ll be long term.

Time will tell.

Yes, agree it will be shortlived.

It's depressing a lever to control borders & drugs based on past actions.

Should be restored without tariffs once the primary issues are addressed.

 

[dbsb3233]

I hope you are correct.

Warren Buffet suggests that this is an act of War economically. Not sure if the "little guy" will be able to sacrifice economically of what will happen to their pocketbook but many of them sure seem to be optimistic though.

Like most Wars, no one wins. I am afraid this will not end "good" but like you stated, time will tell.

Keep in mind that this will have very little impact on probably over 90% of the typical person's spending. Look at where most of your monthly spending goes... mortgage/rent, insurance, utilities, healthcare, internet/cell/TV services, etc. Not affected.

It could add a few pennies to gasoline, it'll make a *few* grocery items more expensive (that many people will just avoid). Similarly, it'll make certain cars and certain other items much costlier, but consumers will usually just avoid those too. If the tariffs are still in place when dealer inventory of Mach-E's runs out, if someone really wants a new one from the factory it would cost a lot more (unless Ford just eats most of the cost). Which will cause buyers to choose a different model that doesn't have the tariff (which is kinda the point of a tariff).

In other words, yes, it'll raise the price of certain items, but they make up a tiny share of most people's overall expenses. Unless they happen to be heavily dependent on (or just REALLY want) a particular item affected.

It will, however, have significant affect on certain businesses that are heavily dependent on those imports. It will hurt them, but help others when consumers choose non-affected products instead.

Tariffs are a tax. And yes, taxes hurt. But at least these are more easily avoided by most consumers than other taxes.

 

[Jimrpa]

I would guess dealers have been stockpiling imports leading up to this. And that Ford will stop most shipping and let them pile up at the Mexico factory for a while hoping this ends soon.

Factories shut down for weeks periodically anyway. Similar thing. Dealer inventory can carry them for a while.

That’s what my dealer told me Lincoln did with Nautilus.

 

[Sikkun]

It's depressing a lever to control borders & drugs based on past actions.

That 0.2 percent drugs coming from Canada really needs a 25% tariff to stop.

But hey Russia needs sanctions removed because Putin has been a good little boy.

 

[4sallypat]

That 0.2 percent drugs coming from Canada really needs a 25% tariff to stop.

But hey Russia needs sanctions removed because Putin has been a good little boy.

Ummm Canada has a bigger problem with illegal border crossings - not the drugs.

Remember the very recent shootout between 2 illegals who were armed (something Canadians aren't allowed to own) entering the US and a US border patrol agent was killed ?

https://apnews.com/article/vermont-border-patrol-shooting-d40ffa36bad16cfce6174daa3cd3fb96

 

[Jimrpa]

That 0.2 percent drugs coming from Canada really needs a 25% tariff to stop.

But hey Russia needs sanctions removed because Putin Trump has been a good an obedient little boy.

There! Fixed it for ya! ?

 

[E90alex]

Keep in mind that this will have very little impact on probably over 90% of the typical person's spending. Look at where most of your monthly spending goes... mortgage/rent, insurance, utilities, healthcare, internet/cell/TV services, etc. Not affected.

It could add a few pennies to gasoline, it'll make a *few* grocery items more expensive (that many people will just avoid). Similarly, it'll make certain cars and certain other items much costlier, but consumers will usually just avoid those too. If the tariffs are still in place when dealer inventory of Mach-E's runs out, if someone really wants a new one from the factory it would cost a lot more (unless Ford just eats most of the cost). Which will cause buyers to choose a different model that doesn't have the tariff (which is kinda the point of a tariff).

In other words, yes, it'll raise the price of certain items, but they make up a tiny share of most people's overall expenses. Unless they happen to be heavily dependent on (or just REALLY want) a particular item affected.

It will, however, have significant affect on certain businesses that are heavily dependent on those imports. It will hurt them, but help others when consumers choose non-affected products instead.

Tariffs are a tax. And yes, taxes hurt. But at least these are more easily avoided by most consumers than other taxes.

The auto industry will probably be hit the hardest. Almost every car will be affected by the tariffs, even if not built in Canada or Mexico. Many components and raw materials are sourced from Canada and Mexico and assembled into a car in a US factory. Sometimes they cross the borders several times before they get installed in a car. But you can bet even cars not directly subject to tariffs will see price increases. They see competitor A B and C have to increase prices 25%. Well company D is not subject to tariffs but they can still increase prices by 10,15,20% and still undercut the others. It will affect used car prices due to reduced supply as people will hold onto their cars longer or buy used because they can no longer afford new. It will affect repair costs because of where components are made.

Auto industry aside, a lot of paper products source wood pulp from Canada even if the actual product is made in the US. Eg toilet paper and paper towels.

60% of imported crude oil used by US refineries come from Canada. That will increase gasoline and diesel by more than just a few cents.

Canada exports a lot of energy to the US as well, both in electricity and natural gas so that will raise utility rates.

A lot of farmers rely on exports to make up a significant chunk of their volume and income. With other countries issuing retaliatory tariffs those exports will decrease. Farmers will raise prices to try to make up for lost income which will increase food prices.

The tariffs will be much for far reaching than you think. No, obviously not everything is going to see an immediate 25% increase but things will be going up which will increase inflation which will in turn also make everything else go up as well even not subject to tariffs.

 

[dbsb3233]

60% of imported crude oil used by US refineries come from Canada. That will increase gasoline and diesel by more than just a few cents.

The key word there being "imported". Most of our crude oil is not imported. We import 4.3 Mbpd from Canada, out of 20.2 Mbpd total. That's 21%. A 10% tariff on 21% is a 2% increase. 2% increase on $3.00 gas is 6 cents (average). Some states will see more, some less.

We see gas move that much in day on a pretty regular basis.

Yes, some raw materials will be affected that are a piece of the cost of products made here. But usually it's just a piece, making far less impact than importing the whole product (vs the tariff applied to the whole thing). And again, they typically don't make up much of the average person's spending.

I'm not trying to defend the tariffs (I'm no fan of higher taxation), I'm just saying the impact to the average American won't be all that significant. Far less significant than, say, raising income tax rates, for example.

 

[Sikkun]

Ummm Canada has a bigger problem with illegal border crossings - not the drugs.

Remember the very recent shootout between 2 illegals who were armed (something Canadians aren't allowed to own) entering the US and a US border patrol agent was killed ?

https://apnews.com/article/vermont-border-patrol-shooting-d40ffa36bad16cfce6174daa3cd3fb96

Probably got buried under a couple school shootings.

Maybe a 25% tariffs on schools would help.

Canada’s illegal crossings is also a small fraction compared to Mexico, if drugs and crossing are the excuse Canadas tariff would be a small fraction of Mexicos…more like a 2% tariff, but it’s not.

Man does keep threatening to send troops or annex the country though. Sounds a lot more like wanting to invade for natural resources than drugs and illegals.

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