Rumorpile: U.S. Envoy Proposes Zero Tariffs Deal To German Automakers

This totally makes sense and would be the first actual rational approach from Dictator Potus45.

Sounds like what i already said... His objective wasn't to slap huge tariffs on other countries but to make both trades fair. There's no reason there should be a 2.5% tariff on things imported from the EU and then stuff we send to the EU has a 10% tariff. 

People who accuse Europe of not playing fair don't seem to remember the 25% tariff we've had on EU trucks since the 1960s.

It's also why ALL of the German automakers have built plants in the US over the past 20+ years. 

There is quite the pretense in demanding the EU "play fair" when we've been far worse than 10% tariff for a long time. 

Ford gets around this tariff for the Transit Connect by shipping them in from Turkey with a full set of seats, stripping the seats out after entry, and converting them back into cargo vans.  They throw away the seats..... that's how ridiculously unfair our own tariffs have been. 

1 hour ago, dfelt said:

This totally makes sense and would be the first actual rational approach from Dictator Potus45.

I would be for free and open trade.

16 minutes ago, Drew Dowdell said:

People who accuse Europe of not playing fair don't seem to remember the 25% tariff we've had on EU trucks since the 1960s.

It's also why ALL of the German automakers have built plants in the US over the past 20+ years. 

There is quite the pretense in demanding the EU "play fair" when we've been far worse than 10% tariff for a long time. 

Ford gets around this tariff for the Transit Connect by shipping them in from Turkey with a full set of seats, stripping the seats out after entry, and converting them back into cargo vans.  They throw away the seats..... that's how ridiculously unfair our own tariffs have been. 

 

One wonders how hard everyone will gun for the F150 if the chicken tax is removed.

So many industries are subsidized by governments everywhere in different ways, tariffs are just one part of the equation.

1 hour ago, frogger said:

So many industries are subsidized by governments everywhere in different ways, tariffs are just one part of the equation.

You mean it's not a singular, back & white issue? Huh.

Ford gets around this tariff for the Transit Connect by shipping them in from Turkey with a full set of seats, stripping the seats out after entry, and converting them back into cargo vans.  They throw away the seats..... that's how ridiculously unfair

our own tariffs have been.

5 minutes ago, balthazar said:

You mean it's not a singular, back & white issue? Huh.

 

 

That practice is ridiculous (pay for seats, pay for seat installation, pay for seat removal/disposal), but I'm going to have to assume Ford is making money off that convoluted chain of events, which means all the EU trucks (???) have the potential to be profitable also (this is beside the fact that the EU doesn't understand the US truck market).

The Ford Transit Connect, the Promaster, the Transit, even the Nissan NV all dispute the idea that the Europeans can't do "trucks" in this market.  I'd say that only Toyota has come close in the Full-Size segment, but they've let their entry wither on the vine.

The ones to watch will be VW and Hyundai... if those two jump in with serious competitors, particularly in the Colorado/Ranger segment, it will start to be an interesting race. 

4 hours ago, Drew Dowdell said:

People who accuse Europe of not playing fair don't seem to remember the 25% tariff we've had on EU trucks since the 1960s.

It's also why ALL of the German automakers have built plants in the US over the past 20+ years. 

There is quite the pretense in demanding the EU "play fair" when we've been far worse than 10% tariff for a long time. 

Ford gets around this tariff for the Transit Connect by shipping them in from Turkey with a full set of seats, stripping the seats out after entry, and converting them back into cargo vans.  They throw away the seats..... that's how ridiculously unfair our own tariffs have been. 

 

Excellent point.  They should offer to the EU to get rid of the chicken tax and the USA drop the 2.5% tariff on imports in exchange for the EU dropping their 10% tariff.  Include the UK in that since they backed out of the EU, but then everyone is on the same playing field.

And if you are Germany, what are you worried about, no one in Germany is buying an American car anyway.  And it would help American businesses get cheaper work trucks, because if Ford has to throw away $500 in seats, it is the customer that pays that $500, not Ford.  And there are small pick ups and vans in Europe that we don't even get here because of the chicken tax.

2 hours ago, Drew Dowdell said:

The Ford Transit Connect, the Promaster, the Transit, even the Nissan NV all dispute the idea that the Europeans can't do "trucks" in this market.  I'd say that only Toyota has come close in the Full-Size segment, but they've let their entry wither on the vine.

The ones to watch will be VW and Hyundai... if those two jump in with serious competitors, particularly in the Colorado/Ranger segment, it will start to be an interesting race. 

Correct, and again, good for the consumer.  If the only mid-size trucks to choose from are Nissan, Toyota and GM, you get situations where the Frontier and Tacoma sit on the market untouched for 12 years because there is no other choice.  If VW and Hyundai enter in with branch new trucks that are $1,000 cheaper than a Tacoma, you'll see Toyota put out an all new better Tacoma that is cheaper than the current one.  

And we know this is true because for 25 years if you wanted a luxury car it was Lincoln or Cadillac, and they got lazy as hell and build crap.  Now Cadillac tries like crazy and undercuts their competition in price and Lincoln is finally waking up because there are 10+ luxury brands now to pick from.

4 hours ago, Drew Dowdell said:

The Ford Transit Connect, the Promaster, the Transit, even the Nissan NV all dispute the idea that the Europeans can't do "trucks" in this market.  I'd say that only Toyota has come close in the Full-Size segment, but they've let their entry wither on the vine.

The ones to watch will be VW and Hyundai... if those two jump in with serious competitors, particularly in the Colorado/Ranger segment, it will start to be an interesting race. 

Those are VANS, not trucks. Cardboard boxes with wheels, for stuff. There's nothing there to 'get'- they're the 'dry white toast' of motor vehicles. And they have to be like 98% commercial/fleet sales. Hardly marketing to retail consumers.

And we all watched nissan & toyoyo jump in with all seriousness with their F/S trucks, amid cries of 'the end of the Domestic truck dominance is nigh!!', and we all know how that turned out.

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for 25 years if you wanted a luxury car it was Lincoln or Cadillac

What's this '25 year' timespan, specifically? What about all the other American luxury cars? Isn't the timespan closer to '75 years'? Why did it take until the '90s benchmarking for mercedces to move to become a luxury brand (for a while anyway)?

10 hours ago, balthazar said:

Those are VANS, not trucks. Cardboard boxes with wheels, for stuff. There's nothing there to 'get'- they're the 'dry white toast' of motor vehicles. And they have to be like 98% commercial/fleet sales. Hardly marketing to retail consumers.

And we all watched nissan & toyoyo jump in with all seriousness with their F/S trucks, amid cries of 'the end of the Domestic truck dominance is nigh!!', and we all know how that turned out.

What's this '25 year' timespan, specifically? What about all the other American luxury cars? Isn't the timespan closer to '75 years'? Why did it take until the '90s benchmarking for mercedces to move to become a luxury brand (for a while anyway)?

3

The Euros will never build a full-size pickup because they can't sell it globally, if they did, it would be a half-hearted effort just to dip their toe in the water.

It's the mid-size segment where they'll come in and tackle Ford, GM, Nissan, and Toyota. Dropping the Chicken Tax means the X-Class comes here, that the Amorak (sp?) comes here.  BMW doesn't build trucks currently, but given the market for them globally, I could see them coming out with a T535iXDrive and T745iTxDrive-MSportPersonal. Soon after, the T435diXdrive bluefficiency would come out... a 4-door crew cab pickup.... coupe.  They'd sell 12 of them, all to US BMW executives, but count it in with 3-series sales.

Mercedes will just rebadge a Titan.

Land Rover could make that Defender Pickup and have it have a chance. 

First of all Mercedes was selling luxury cars in the USA as far back as the late '70s.  In the '80s, it seemed that the in thing to buy from a luxury standpoint was buying a Benz or a BMW.  (Audi was doing OK until about 1986.)  Only in 1990 with the Original Lexus LS did the Germans face real competition in the luxury car segment.  (No, the Acura Legend from 1986 was near-luxury at best, even back then).

If the US were to somehow secure tariff-free access to the EU in exchange for the same thing here, I do have one question:  who buys US-made cars and trucks in Europe?  EU citizens are a lot more parochial in terms of what cars they buy than we are.  My other question is this: what does Detroit gain in having tariff-free and unfettered access to a market that will not buy a single thing from us?

13 minutes ago, riviera74 said:

If the US were to somehow secure tariff-free access to the EU in exchange for the same thing here, I do have one question:  who buys US-made cars and trucks in Europe?  EU citizens are a lot more parochial in terms of what cars they buy than we are.  My other question is this: what does Detroit gain in having tariff-free and unfettered access to a market that will not buy a single thing from us?

Not many people. I pulled this quote from another Handelsblatt story, back in April

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But that won’t mean that American cars sell like hotcakes in Germany, said Andreas Hix, head of the Frankfurt car dealership Autec, which specializes in importing only American cars like the 400hp Dodge Challenger. Mr. Hix sells a mere 300 cars a year to his specialized audience.

“Unfortunately, most American manufacturers show no interest in the German market,” he said, and gives his Dodge as a prime example. First, he must get the car from a dealer in Canada, and then has to rebuild the car from the ground up to meet European safety specifications, which are more stringent than in the US.

The process adds about 30 percent to the American car’s sticker price, he said, so an import duty is really no impediment to the handful of enthusiasts who really want a muscle car. What most German car buyers want is a German-made car.

Of course, there are outliers. The Ford Mustang does very well, but it is significantly more expensive.

5.0L V8 GT (USA): $35,355
5.0L V8 GT (UK): $54,970*

*"This is the manufacturer's Recommended 'On the Road' price for the model shown. It includes delivery to Dealer, 12 months Government Vehicle Excise Duty, Government First Registration Fee, cost of number plates (estimated) and VAT (at 20%) but excludes any available retail Customer Saving" From Ford UK's site.

A lot of that price increase most likely comes down to the various European regulations.

20 minutes ago, riviera74 said:

First of all Mercedes was selling luxury cars in the USA as far back as the late '70s.  In the '80s, it seemed that the in thing to buy from a luxury standpoint was buying a Benz or a BMW.  (Audi was doing OK until about 1986.)  Only in 1990 with the Original Lexus LS did the Germans face real competition in the luxury car segment.  (No, the Acura Legend from 1986 was near-luxury at best, even back then).

If the US were to somehow secure tariff-free access to the EU in exchange for the same thing here, I do have one question:  who buys US-made cars and trucks in Europe?  EU citizens are a lot more parochial in terms of what cars they buy than we are.  My other question is this: what does Detroit gain in having tariff-free and unfettered access to a market that will not buy a single thing from us?

Just quibbling on terms... the only luxury car Mercedes sold back then was the S-Class.  The other cars they sold were like the CLA is today... luxury pricing on less than mediocre vehicles.  The E-class of the day was an awkward Malibu sized car powered by an 89hp - 110hp 4-cylinder.... or if you really wanted to twist your tweed, you could get it with a 65hp non-turbo Diesel.... not exactly anything close to zoom zoom. 

1 hour ago, Drew Dowdell said:

Mercedes will just rebadge a Titan

I just cannot WAIT for that product... 

14 hours ago, Drew Dowdell said:

Just quibbling on terms... the only luxury car Mercedes sold back then was the S-Class.  The other cars they sold were like the CLA is today... luxury pricing on less than mediocre vehicles.  The E-class of the day was an awkward Malibu sized car powered by an 89hp - 110hp 4-cylinder.... or if you really wanted to twist your tweed, you could get it with a 65hp non-turbo Diesel.... not exactly anything close to zoom zoom. 

They did have the SL in the 1970s, plus the 600 Grosser.  The W123 E-class did offer a 182 hp inline six, that puts it in line with the 180 hp V8 Cadillac Seville of the late 70s and more powerful than the Lincoln Versailles of the era, even though the E-class was a much smaller car than those.   The W123 E-class was a mid-size car for the day, it is like today's C-class in size, but that is 40 years of evolution. 

Except the SL wasn't a luxury car in either the '70s OR the '80s. Cheap cheap cheap was the motivation.

1 hour ago, balthazar said:

Except the SL wasn't a luxury car in either the '70s OR the '80s. Cheap cheap cheap was the motivation.

Nonsense.   That's just your biased opinion.  The SL has always been considered a luxury car.  

Pfffft- every been in one? I was, an '85.
I don't care what the ads claim, the car doesn't meet the bar.

13 minutes ago, balthazar said:

Pfffft- every been in one? I was, an '85.
I don't care what the ads claim, the car doesn't meet the bar.

Just your opinion...you are negative about anything that isn't Murican.   

I've been in an 80s SL, it was fine, albeit a bit dated (early 70s design).  Certainly nicer inside than the dreadful Fisher-Price C4 Corvette interior (the only 2 seat convertible GM had in the mid 80s). 

Where is this 'Murca' you frequently speak of; I'm not familiar with it.

Correct- I'm giving my opinion, as you are with yours.
I can also call it 'fine', I just can't call it 'luxury', even for the time period.
Console & seats were terrible, tons of exposed screws, not at all leading edge in terms of construction. Cheap switch gear, horrible plastics, thin seats, precious few amenities... there's nothing about the interior anyone can point to as 'luxurious'. It simply; isn't.

On ‎7‎/‎7‎/‎2018 at 7:04 PM, Cubical-aka-Moltar said:

Just your opinion...you are negative about anything that isn't Murican.   

I've been in an 80s SL, it was fine, albeit a bit dated (early 70s design).  Certainly nicer inside than the dreadful Fisher-Price C4 Corvette interior (the only 2 seat convertible GM had in the mid 80s). 

He's speaking of build quality.... and the Corvette was not considered a luxury car in the mid-80s.  The SL in the 80s had exposed screws in the trim, the lights... giant rubber grommets behind the door handles. . It had those huge battering ram bumpers (the corvette was much more svelt on that count). Even my Oldsmobile has better build quality... I cannot see any exposed screws from the drivers seat except for one small silver one holding the power window/door/seat control in place. 

The SL has really fantastic leather seats and a dream of an engine that is a nightmare on your checkbook to repair.  Like the CLA and G-Wagon (until 2018), just because it sold at a luxury car price does not make it a luxury car. 

Well I am happy this discussion is happening.  The U.S. cannot be the world's piggybank forever.  Thank you Mr. President.

2 hours ago, ocnblu said:

Well I am happy this discussion is happening.  The U.S. cannot be the world's piggybank forever.  Thank you Mr. President.

This statement shows an utter ignorance of what is going on both before and after Trump.  Hope you like paying a lot more for everything... even your "American made" stuff.  It will wipe out any tax break you may have received and then some.

Seems Germany and China have come to a free trade agreement.

https://www.reuters.com/article/us-germany-china/with-raft-of-deals-china-and-germany-swear-to-keep-trade-free-idUSKBN1JZ0VM

Now if only the US would work for this rather than tariffs.

14 hours ago, Drew Dowdell said:

This statement shows an utter ignorance of what is going on both before and after Trump.  Hope you like paying a lot more for everything... even your "American made" stuff.  It will wipe out any tax break you may have received and then some.

You can downvote me all you like @ocnblu. It doesn't change the fact that you don't understand the economics of what is happening and what was happening before trump.  The most "American" sedan out there today is the Avalon and it is likely to increase in cost by about $1700.  Buick could potentially be closed as most of its lineup is imported.  Retaliatory tariffs mean that all those GLEs and X5s built in the US can no longer be sold in the EU costing Americans jobs. 

The ham fisted tariffs are already costing hundreds of jobs and potentially wiping out 50% of the nail making capacity in North America.... so the cost of building a house will become higher.  Housing prices being higher, plus mortgage interest rates going higher means fewer people buy homes, means fewer people shop at home improvement stores and furniture stores.   Everything is tied to everything else.  Toying with the economy is something done with delicacy.... not the way it is being done now. 

Seems like Ocn's post above is a good way to test the community moderation.  If it gets enough reports for abusive behavior, it automatically gets moderated away.  Democracy in action. 

These 'computer models' that link together chains of possibilities certainly come off as tenuous on the surface of their claims.

I'd like to know the specifics of how a 25% imported steel tax could cost a business 50% (of what- revenue? future orders?) in just 2 weeks.
And although it currently produces about 50% of the nails in the US, the article states there are about 15 other companies.... who's to say they aren't in a different scenario and have the capability to take up the slack? What's the cost comparison between imported vs. US-sourced steel? Are these other companies using US-sourced steel, perhaps what used to be more expensive, perhaps resulting in their lower sales? Does the 'Walmart of Nails' have such a huge swath of the segment because it was using cheaper imported steel? Perhaps the imported steel nail makers will simply join the buggy whip makers in finding new industries or simply move to the rising producers. The U.S. is the world's 3rd largest producer of steel- there are other options beside China.

Were I interested to the point of dedicated research, perhaps I would pick a side to be on. But it's not as simplistic an issue as some would have it be.

4 minutes ago, balthazar said:

These 'computer models' that link together chains of possibilities certainly come off as tenuous on the surface of their claims.

I'd like to know the specifics of how a 25% imported steel tax could cost a business 50% (of what- revenue? future orders?) in just 2 weeks.
And although it currently produces about 50% of the nails in the US, the article states there are about 15 other companies.... who's to say they aren't in a different scenario and have the capability to take up the slack? What's the cost comparison between imported vs. US-sourced steel? Are these other companies using US-sourced steel, perhaps what used to be more expensive, perhaps resulting in their lower sales? Does the 'Walmart of Nails' have such a huge swath of the segment because it was using cheaper imported steel? Perhaps the imported steel nail makers will simply join the buggy whip makers in finding new industries or simply move to the rising producers. The U.S. is the world's 3rd largest producer of steel- there are other options beside China.

Were I interested to the point of dedicated research, perhaps I would pick a side to be on. But it's not as simplistic an issue as some would have it be.

In this case, this company was buying steel from itself in Mexico.  The automotive equivalent would be if GM owned a steel plant in Mexico, rolled it into sheet metal, and then shipped it to Michigan for stamping in Lansing. 

The tariffs allow the US steel companies to raise their prices, so even if they did switch to US steel in order to avoid the tariff, they aren't avoiding the cost increase.   Any shortage in the supply chain will cause the other 14 manufacturers to raise prices as well. In the end, anyone who buys nails will pay more.... and that's why sudden moves like this are bad. 

50 minutes ago, Drew Dowdell said:

The tariffs allow the US steel companies to raise their prices, so even if they did switch to US steel in order to avoid the tariff, they aren't avoiding the cost increase.   Any shortage in the supply chain will cause the other 14 manufacturers to raise prices as well. In the end, anyone who buys nails will pay more.... and that's why sudden moves like this are bad. 

US Steel companies are not precluded from raising their prices regardless of import tariffs. And there's nothing mandating an automatic price increase (from US suppliers) if/when a tariff does hit... unless they rely heavily on imported steel. Are we assuming eliminating 1 nail maker's steel imports would create a supply shortage? As no other companies were named, can I assume all the other 14 companies use US steel suppliers? Look how many vehicle nameplates we lost since 2000- no supply shortage as a result : segments adjust, demand can drive supply, markets change.

The claim that all nail prices will automatically increase immediately is without factual support.

Clear, active intent by a site owner to restrict the range of ideas and viewpoints presented on an internet forum.  Do you believe this will lead to increased traffic at Cheers & Gears going forward?

8 hours ago, Drew Dowdell said:

Seems like Ocn's post above is a good way to test the community moderation.  If it gets enough reports for abusive behavior, it automatically gets moderated away.  Democracy in action. 

7 hours ago, balthazar said:

US Steel companies are not precluded from raising their prices regardless of import tariffs. And there's nothing mandating an automatic price increase (from US suppliers) if/when a tariff does hit... unless they rely heavily on imported steel. Are we assuming eliminating 1 nail maker's steel imports would create a supply shortage? As no other companies were named, can I assume all the other 14 companies use US steel suppliers? Look how many vehicle nameplates we lost since 2000- no supply shortage as a result : segments adjust, demand can drive supply, markets change.

The claim that all nail prices will automatically increase immediately is without factual support.

The Honda Civic can go over $30k now. In May I was driving a Cruze with a $27k sticker and zero powertrain upgrades. 

There was over supply of vehicles when we lost those nameplates. I don't know the supply level of nails, but if that company goes under, you better believe there is going to be a shortage if 50% of the supply goes away.

The whole point of tariffs is to give the protected industries some breathing room on price. No they are not required to raise their prices, but now that their competition's price is raising they would not be fulfilling their fiduciary duty to stock holders. Will the results be immediate? I can't answer that... but without a change in course, prices will be higher.

1 hour ago, ocnblu said:

Clear, active intent by a site owner to restrict the range of ideas and viewpoints presented on an internet forum.  Do you believe this will lead to increased traffic at Cheers & Gears going forward?

 

You can express your viewpoint in more appropriate ways. It's the language, not the sentiment, that I object to. And in reply to your pre-edited comment.... Let's not get  hyperbolic about if it's dangerous to ask the community if that type of comment is appropriate here. You couldn't get such language past the moderators at Edmunds for example.

1 hour ago, Drew Dowdell said:

There was over supply of vehicles when we lost those nameplates.

Hmmm. Dates of death:: Plymouth: '01, Olds: '04, Pontiac: '10, Merc: '11. US sales only dipped for the recession, they were 16.0m-16.8m in '04-07 and they rose from 10.4m to 11.5m to 12.7m from '10-12. '15-17 have been running at 17.3m to 17.1m. Those stats do not support an 'oversupply' of brands.
 

Quote

I don't know the supply level of nails, but if that company goes under, you better believe there is going to be a shortage if 50% of the supply goes away.

ONLY if demand is the same and no more supply comes online. You are assuming the other 14 nail companies have no interest/ability to increase production.

As with US vehicle brands, one company declines/disappears, others increase their supply.

Yes; car prices increase, they ALWAYS increase. Always.

1 hour ago, balthazar said:

Hmmm. Dates of death:: Plymouth: '01, Olds: '04, Pontiac: '10, Merc: '11. US sales only dipped for the recession, they were 16.0m-16.8m in '04-07 and they rose from 10.4m to 11.5m to 12.7m from '10-12. '15-17 have been running at 17.3m to 17.1m. Those stats do not support an 'oversupply' of brands.
 

ONLY if demand is the same and no more supply comes online. You are assuming the other 14 nail companies have no interest/ability to increase production.

As with US vehicle brands, one company declines/disappears, others increase their supply.

Yes; car prices increase, they ALWAYS increase. Always.

Plymouth was because there was no point in marketing low cost sedans and minivans that were identical in content and price to Dodge. 

Olds was a mistake, it was the most technologically advanced division at the time outside of Cadillac. If nothing else, Olds should have been merged into Saturn in order to shed the name baggage.

By the time Saturn died, they no longer did anything special. Everything they built with the exception of the Astra could be bought at the same price at another GM dealership

Saab was just excess capacity that only a few fanbois wanted to keep around.

Pontiac had some special models, but largely survived on the $199 down / $199 a month G6 leases, and it simply wasn't sustainable in that capacity. At the time, GM was forced to flood the market with cars simply to keep up with their union and capital obligations.  Ford was doing the same with Mercury and the lower end of their car lineup.  Ford and Pontiac both were dumping their small and mid-size sedans onto the Federal Government. 

To that end, there is still excess capacity out there. Lordstown is only about 50% capacity even when Cruze production is maxed out, I don't even know what it is down to now.  Lansing is about to get a whole lot more room. VW Chattanooga apparently has room for more. The list goes on. 

Kinda went off on a 'scenic bypass' there, me thinks.

Reality is complex.  Rash economic policy decisions made by short-sighted, incompetent politicians can result in unintended consequences.