Industry News: Automakers To President Trump: Tariffs Will Cost Jobs and Raise Prices

[William Maley]

Automakers have been edge for a few months with talk of a trade war and possibly putting up to a 25 percent tariff on imported new vehicles. They only would be pushed further to the edge as President Donald Trump tweeted last week a 20 percent import tariff on all cars assembled in the European Union. Now, automakers are rebuking the President over this.

Reuters reports today that two trade groups, representing nearly every major global automotive brands have issued comments saying the president shouldn't go forward with tariff. The two groups in question are the Association of Global Automakers (represents Honda, Hyundai, Kia, Nissan, Subaru, Toyota, and others) and Alliance of Automobile Manufacturers (represents General Motors, Ford, FCA, BMW, and others). 

The primary concerned brought up by both groups? Jobs. 

“Rather than creating jobs, these tariffs would result in the loss of hundreds of thousands of American jobs producing and selling cars, SUVs, trucks and auto parts,” said the Association of Global Automakers.

Both groups cite a study done by the Peterson Institute for International Economics which estimates job losses between 195,000 to 624,000 depending if other countries retaliate with their own tariffs.

Next up is the increased cost on a new vehicle. The Alliance of Automobile Manufacturers says a consumer could expect to pay an average of $5,800 more on a new car. This number is based on analysis of 2017 sales data and factoring in a 25 percent tariff. New cars are already expensive - Kelly Blue Book said the average transaction price for May stood at $35,635.

The final concern brought up deals with a decrease in investments into new technologies such as electrification and autonomous vehicles.

“We are already in the midst of an intense global race to lead on electrification and automation. The increased costs associated with the proposed tariffs may result in diminishing the U.S.’ competitiveness in developing these advanced technologies,” said the Alliance.

The U.S. Commerce Department which is investigating new car imports on the national security has said that it hopes to wrap up their investigation either next month or August.

Source: Reuters

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[riviera74]

Of course tariffs will raise costs and hurt consumers across the board and possibly kill jobs.  Does the president care?  Of course not.  Do his base voters care?  Well, maybe . . . . possibly . . . .

[smk4565]

Let's lose 600,000 jobs and raise the price of a mid-level Camry or Malibu to $40k in the interest of "national security." These tariffs are a horrible idea, and I am glad these auto companies are banding together to put their lobbying power behind something good for a change.

[Robert Hall]

1 hour ago, riviera74 said:

Of course tariffs will raise costs and hurt consumers across the board and possibly kill jobs.  Does the president care?  Of course not.  Do his base voters care?  Well, maybe . . . . possibly . . . .

Funny thing is a lot of the people working in those non-union plants started by foreign car makers probably voted for him..

[G. David Felt]

Potus 45 does not care, he only cares about becoming a dictator of America and increasing his own wealth at everyone else's expense.

We all know that Trade Wars never make things better. 

This is part of the upcoming recession brought to you by the 1% club that does not care.

What I worry about is that this is going to bring about a new global caste system. There seems to be more and more that want a global socialist system and more and more of the elite power pack that wants a caste system. 

Sadly Democracy and freedom is the loser here.

When a daughter of a president earns 82 million estimated in a year that she is also supposedly working for the american people, clearly conflicts of interest no longer seem to be an impeachable offense.

Our system has become corrupt all the way to the top and this brings about what we now see here in a trade war that will cost many jobs beyond the auto industry.

Trickle up reaction is what will happen, as jobs are lost, companies close and we could enter our 3rd great depression since the 2nd great depression of 2007 to 2012.

Added note: One of the worlds largest Tech companies is going to consolidate their excessive overlapping storage portfolio to clean house on the best of small, medium, large and Enterprise storage. I estimate they will lay off about 30-40 thousand tech workers as they retire old block storage. These people are going to be out by the end of the year searching for jobs at a time that this Tradewar is killing jobs.

[daves87rs]

5 hours ago, smk4565 said:

Let's lose 600,000 jobs and raise the price of a mid-level Camry or Malibu to $40k in the interest of "national security." These tariffs are a horrible idea, and I am glad these auto companies are banding together to put their lobbying power behind something good for a change.

I'm starting to think my projection for the upcoming recession is now going to be both earlier, and much deeper than my previous dark plans.....starting to think this guy thinks he is playing a board game or something.....

[smk4565]

Yeah I would agree with all.  The southern states voted Trump in, I don't see what he has got them, or what Republicans in general have got them as they are the poorest states for the most part.  And the rich are getting richer at their expense.  Money never trickles down.

[balthazar]

LOL

[Drew Dowdell]

Harley just announced they are moving more production over seas specifically because of the tariffs. Sales are falling here and increasing in other countries (China specifically), so they don't want to get stuck behind tariffs to sell to foreign countries.

CEO said it was 100% because of the tariffs.

[G. David Felt]

3 hours ago, Drew Dowdell said:

Harley just announced they are moving more production over seas specifically because of the tariffs. Sales are falling here and increasing in other countries (China specifically), so they don't want to get stuck behind tariffs to sell to foreign countries.

CEO said it was 100% because of the tariffs.

https://www.marketwatch.com/story/harley-davidson-to-close-us-factory-as-sales-slide-2018-01-30

Yup not a pretty read but clearly you can tell they are cleaning up and simplifying operations here in the US and expanding overseas to support a more global diverse manufacturing system to offset the whole tradeware / Tariffs BS.

Totally Makes SMART BUSINESS SENSE!

Harley needs to get the EV Bike "Live Wire" up for sale if they want to get younger new riders. Heck this old rider would buy a Live Wire bike, the only thing Harley would have that interests me. The rest of the product line is just old garbage to me.

[daves87rs]

15 hours ago, Drew Dowdell said:

Harley just announced they are moving more production over seas specifically because of the tariffs. Sales are falling here and increasing in other countries (China specifically), so they don't want to get stuck behind tariffs to sell to foreign countries.

CEO said it was 100% because of the tariffs.

It is what happens when you bring a knife to a gun fight.....#yeahwethoughtthisout

[Guest potluck]

taxes making America great again....doesn't have the same ring to it as I love what you do for me toyota

[G. David Felt]

OUCH, Global is feeling the tradewar.

https://www.reuters.com/article/us-global-economy/global-factory-growth-slowing-china-u-s-trade-war-biting-idUSKBN1KM3HG

[balthazar]

Not buying the Harley company line straight up here. They planned on consolidating production as far back as 2015 and closing their Kansas City plant, due to slipping sales THEN. In 2017, H-D said they were in the 4th year of sliding sales. They also announced in 2017 they would be opening a plant in Thailand (to avoid Thailand's 60% import tariff/ da trade warzz!!!). They also opened a plant in 2011 in India.

H-D wants to expand overseas markets and follow volume, it makes sense to manufacture abroad, period. "100% because of the tariffs" doesn't hold much water. BTW- a H-D Road King started at $19K last year- dey ain't cheap already.

[G. David Felt]

42 minutes ago, balthazar said:

Not buying the Harley company line straight up here. They planned on consolidating production as far back as 2015 and closing their Kansas City plant, due to slipping sales THEN. In 2017, H-D said they were in the 4th year of sliding sales. They also announced in 2017 they would be opening a plant in Thailand (to avoid Thailand's 60% import tariff/ da trade warzz!!!). They also opened a plant in 2011 in India.

H-D wants to expand overseas markets and follow volume, it makes sense to manufacture abroad, period. "100% because of the tariffs" doesn't hold much water. BTW- a H-D Road King started at $19K last year- dey ain't cheap already.

Harley is an overrated product for the most part, I am excited by the Live Wire electric bike, but wonder what they will charge for it.