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Trump threatens German car makers with 35% U.S. import tariff

MaggieD said:
DT has said all along that he would put tariffs on cars made in other countries that are imported into the states.

Go Donald.
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Your Lexus will go up in price quite a bit

Assuming you bought another or kept your old one
 
SheWolf said:
Can't help but ask, WTF does Trump think the role of the president is? It's not up to him to make these kinds of "deals." He needs to introduce legislation and change laws. How can he constantly go after companies one by one, threatening and bribing?

Sooner or later this needs to be explained to him.
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It could be effective in the short term without actually changes to policy. But the companies could just be making statements and not actually do what they have said until actual changes.

Which in a year combined with lobbying against the changed could make trumps tweets as meaningless as 120 characters should be
 
The US doesn't make cars that can credibly compete in overall quality and performance with BMW, Mercedes, Audi, and Porsche. That's the root of the problem, and tariffs won't solve that, they'll just impose a very large "hidden" sales tax on those who can afford and want such cars (which is unfair), and could also lead to trade wars and other counterproductive economic consequences.

Shifting more manufacturing jobs to the US is fine only in areas where we can compete globally in the near future, without continued subsidies.

Globalization is here to stay, and we need to grow up and learn to compete on that playing field, rather than acting entitled to success that we haven't earned. Very ironic that protectionism has been sold as a conservative idea, whereas it actually aligns better with liberal populism.
 
DA60 said:
What a buffoon. So now if BMW builds a plant in Mexico, he will hit them with a tariff?

So now he is saying that they cannot build plants ANYWHERE but America...or he will hit them with a tariff?
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No, Trump is not saying that. Rather, he clearly stated that if BMW builds cars in Mexico and sells them on the American market, there is going to be a big tariff. See the difference?
 
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Cryptic said:
No, Trump is not saying that. Rather, he clearly stated that if BMW builds cars in Mexico and sells them on the American market, there is going to be a big tariff. See the difference?
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How is that reasonable? A non-US company isn't allowed to build a product outside the US and then sell it in the US without a tariff? Should we be faced with tariffs if our companies build in the US and then sell to other countries, rather than build in those countries? This kind of trade war just results in governments collecting more money from consumers, and consumers thereby paying more, i.e. an added tax.
 
Cryptic said:
No, Trump is not saying that. Rather, he clearly stated that if BMW builds cars in Mexico and sells them on the American market, there is going to be a big tariff. See the difference?
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True. But it is almost irrelevant. And think...why would he put tariffs on cars built by BMW that are made in Mexico and shipped to America AND NOT put tariffs on BMW cars made in Germany and shipped to America? It makes no sense to do the former and not the latter. Both are taking U.S. jobs.
If all he is going to do is put tariffs on things made in Mexico and China - than corporations will build plants in other countries with cheap labor. And if he puts tariffs on those, then they will try other countries. Eventually he will have to put them on everywhere the cars are manufactured outside of America or the tariffs will mean nothing.
And if he does that - there WILL be a trade war.

And EVERYONE but the rich gets hurt in a trade war.
 
Gonzo Rodeo said:
This is an interesting one. Our Big 3 has about half-again as much market share in the EU as the German Big 3 has here, but the US car market is about half-again larger. And one of our Big 3 is actually British owned to begin with, so there's that.

Given an increase in domestic sales for an equal decrease in European sales, we come out ahead in terms of employment. And our domestic factories have plenty of spare capacity, and there is plenty of competition in the market, so prices likely wouldn't rise.

Plus, the EU would have to make such a decision, not just Germany. But there really aren't any other countries with major car manufacturers in the EU that would feel the heat of retaliation, so they probably would get the vote. Then again, the EU imports a lot of food, so maybe they'd think twice about retaliatory tarrifs.
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First, I think you meant one of the Big 3 is owned by Italy, not GB (Fiat). But they are both in the EU - for now.

Second, if Trump puts tariffs on German cars, then Germany will put tariffs on American cars. And then it will inevitably spread - as the EU puts pressure on their trading partners to put tariffs on US imports. And Trump will put more tariffs on those countries imports and on and on until you have a trade war...where everyone loses but the rich

Third, price for things will go up a lot, not a little.

Take a widget as an example. Say there are two widgets sold in America. One is made in China and sells for $10 and one is made in America and sells for $11.

Now when Trump puts a 35% tariff on the Chinese-made widget, it will then go up to $13.50 and no one buys it. So the American company has a monopoly and sells all they want and hires more Americans to built the greater demand. Of course, you have to pay 10% more for them then before, but that is worth the extra jobs...right?

Well, it won't be 10%...it will be FAR higher.

You see, the person that owns that American company has a monopoly. So why will he sell his product for $11, when he can sell it for $12.50? He still well undercuts the Chinese made one plus he gets the 'Buy American' sales as well.
Assuming people need this widget, they will have to pay the extra price. They pay 25% more, the company and it's owners/stockholders makes more money. Sure, there are a few more American jobs. But all the little guys/gals have to pay 1/4 more for these widgets while the rich make more money on the monopoly.

Do you want to pay 20-25% more on almost everything you buy just for a few extra U.S. jobs (when the current unemployment rate is already only 4.7%)?

I sure don't.
 
Lord of Planar said:
Why is he an idiot for trying to bring jobs back to America?
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5% is nearly full employment. Start screwing with trade agreements and nobody can tell where it might end- it's certainly more complicated than the bumper-sticker economic theory favoured by Trump Nation. For example, your biggest trading partner, by a large margin, is Canada- you have a trade deficit there and Canada has just signed a free-trade agreement with Europe. How might trade protectionism affect you?
 
DA60 said:
First, I think you meant one of the Big 3 is owned by Italy, not GB (Fiat). But they are both in the EU - for now.

Second, if Trump puts tariffs on German cars, then Germany will put tariffs on American cars. And then it will inevitably spread - as the EU puts pressure on their trading partners to put tariffs on US imports. And Trump will put more tariffs on those countries imports and on and on until you have a trade war...where everyone loses but the rich

Third, price for things will go up a lot, not a little.

Take a widget as an example. Say there are two widgets sold in America. One is made in China and sells for $10 and one is made in America and sells for $11.

Now when Trump puts a 35% tariff on the Chinese-made widget, it will then go up to $13.50 and no one buys it. So the American company has a monopoly and sells all they want and hires more Americans to built the greater demand. Of course, you have to pay 10% more for them then before, but that is worth the extra jobs...right?

Well, it won't be 10%...it will be FAR higher.

You see, the person that owns that American company has a monopoly. So why will he sell his product for $11, when he can sell it for $12.50? He still well undercuts the Chinese made one plus he gets the 'Buy American' sales as well.
Assuming people need this widget, they will have to pay the extra price. They pay 25% more, the company and it's owners/stockholders makes more money. Sure, there are a few more American jobs. But all the little guys/gals have to pay 1/4 more for these widgets while the rich make more money on the monopoly.

Do you want to pay 20-25% more on almost everything you buy just for a few extra U.S. jobs (when the current unemployment rate is already only 4.7%)?

I sure don't.
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So you think I should hurry with my purchase of a new Honda Civic Hatch made in England by British robots from Japanese parts and shipped here? Or the fact that China and Mexico aren't involved mean I have some time?
 
LessBiased? said:
How is that reasonable? A non-US company isn't allowed to build a product outside the US and then sell it in the US without a tariff?
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How reasonable it is depends on the other conditions. My guess is that Trump is going offer BMW a choice:

A. Build cars in Mexico with far cheaper labor costs, sell them on the US market and pay a tariff
B. Build cars in the USA to sell on the US market tariff free (they already do)
C. Build cars in Germany where labor costs are corespond to US labors costs. Sell them on the US market tariff free.

I think this would be very reasonable choices. Likewise, it would be reasonable for Japan to tell Catipillar (sp) the same thing:

If you want to build earth moving equipment in China and then sell in Japan while undercutting Mitsubishi, then there is going to be a tariff.

Or... build Catipillar (sp) machines in Illinois where labor costs are somewhat equal to Japan. Then sell them in Japan and let the market decide who makes the better equipment.
 
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DA60 said:
True. But it is almost irrelevant. And think...why would he put tariffs on cars built by BMW that are made in Mexico and shipped to America AND NOT put tariffs on BMW cars made in Germany and shipped to America?
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Hmmm.... Maybe labor costs in Germany are somewhat equivelant to labor costs in the United States?

This prevents BMW from artificially lowering the costs of their cars by manufacturing in Mexico and lets US car manufacturers compete against BMW on an equal footing.

It also keeps US manufacturers in the United States as there is no longer a cost advantage from moving a manufacturing plant to Mexico.
 
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PeteEU said:
Fine, the US cars being made in Europe by GM and Ford will get a 35% tax on them as well. The man is an idiot.
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Another person who did not read the OP.

Trump stated that BMWs made in Mexico and sold in the US will receive a tariff. BMWs manufactured in Germany and sold in the US could well be a different story. And yes, I would expect Germany to place a tariff on Fords manufactured in say, Algeria and sold in Germany while undercutting German manufacturers.
 
Cryptic said:
Another person who did not read the OP.

Trump stated that BMWs made in Mexico and sold in the US will receive a tariff. BMWs manufactured in Germany and sold in the US could well be a different story. And yes, I would expect Germany to place a tariff on Fords manufactured in say, Algeria and sold in Germany while undercutting German manufacturers.
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I did read the OP and it is irrelevant. Trump is trying to target Mexico if he only puts tariffs on Mexican cars. Any tariff must be universal to work and to be even remotely legal, which means any car made overseas and sold in the US has to have the tariff. Will this happen or is the Furher targeting Mexico because they are dirty illegals?.. Sadly it is more likely the latter.

Does not change the fact that, any company hit by this kind of punishment will have to make a judgement on if the US market is worth the risk. Countries will have to figure out if punishment of US companies is needed, even for those making the product in Europe.
 
DA60 said:
First, I think you meant one of the Big 3 is owned by Italy, not GB (Fiat). But they are both in the EU - for now.

Second, if Trump puts tariffs on German cars, then Germany will put tariffs on American cars. And then it will inevitably spread - as the EU puts pressure on their trading partners to put tariffs on US imports. And Trump will put more tariffs on those countries imports and on and on until you have a trade war...where everyone loses but the rich

Third, price for things will go up a lot, not a little.

Take a widget as an example. Say there are two widgets sold in America. One is made in China and sells for $10 and one is made in America and sells for $11.

Now when Trump puts a 35% tariff on the Chinese-made widget, it will then go up to $13.50 and no one buys it. So the American company has a monopoly and sells all they want and hires more Americans to built the greater demand. Of course, you have to pay 10% more for them then before, but that is worth the extra jobs...right?

Well, it won't be 10%...it will be FAR higher.

You see, the person that owns that American company has a monopoly. So why will he sell his product for $11, when he can sell it for $12.50? He still well undercuts the Chinese made one plus he gets the 'Buy American' sales as well.
Assuming people need this widget, they will have to pay the extra price. They pay 25% more, the company and it's owners/stockholders makes more money. Sure, there are a few more American jobs. But all the little guys/gals have to pay 1/4 more for these widgets while the rich make more money on the monopoly.

Do you want to pay 20-25% more on almost everything you buy just for a few extra U.S. jobs (when the current unemployment rate is already only 4.7%)?

I sure don't.
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So you don't want to do your part in the Make America Great Again thing, huh?
 
PoS said:
Well it seems that our incoming POTUS has a 19th century view on things.
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It's all a bluff meant to show "strength" and now he will get them to make some phony concession that they were planing to do anyway and he will take the "credit". Because he is President they won't say how foolish it makes him look and how little they respect him for it. Trump has lived his entire life on that principle. Meanwhile in Congress they are looking to cut a trillion $ off the 2017 budget, laying off 1000's of employees and eviscerating most of the Depts. in Washington. I'm pretty sure such a move would put us into recession or near one at least.
 
DA60 said:
What a buffoon. So now if BMW builds a plant in Mexico, he will hit them with a tariff?

So now he is saying that they cannot build plants ANYWHERE but America...or he will hit them with a tariff?

And what will the German government do if he does this? Nothing? Of course not. They will retaliate and put huge tariffs on American goods imported to Germany.

This knucklehead, he is going to start a trade war and EVERYONE will lose except the rich.

Anyone who thinks a trade war will help the little guy/gal in America has NO IDEA what they are talking about.


Sure...a few extra, mostly cruddy jobs will come from it. But prices will SKYROCKET...which will hurt the middle class/poor and those on fixed incomes a TON.

America generally exports high end products and imports low end products. SO yes, more crappy jobs will be created. But since those high end exports will have tariffs put on them by other countries in retaliation for Trump's massive tariffs, they will sell far less and have to lay of good American jobs.
Also, by alienating other countries, they will no longer desire the dollar. So it will lose value...which will hurt Americans even more as everything they buy that is imported (like oil) will cost FAR more just on the devalued dollar.

It is macroeconomic lunacy.

The last time America tried it - the partial result was the Great Depression (Smoot-Hawley).

Donald? The reason no one does this is not because you are smart and they are dumb. It's because it has been tried before and it failed MISERABLY. But Trump is too arrogant and too ignorant to learn from history (and economic common sense).
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Maybe, curious, how many millions have you made? How many big deals have you put together?? Saying is one thing and doing is another. What would you rather have him say? Carry business as usual?? How has that worked out in the last 40 years or so???

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MaggieD said:
And you know this how?
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Mind reader and future reader. The left is full of them I noticed when it comes to trump. Me I'll take the wait and see attitude something many here are struggling with.

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Hari Seldon said:
So you think I should hurry with my purchase of a new Honda Civic Hatch made in England by British robots from Japanese parts and shipped here? Or the fact that China and Mexico aren't involved mean I have some time?
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Naaa...you got lots of time, I think.
 
PeteEU said:
I did read the OP and it is irrelevant. Trump is trying to target Mexico if he only puts tariffs on Mexican cars. Any tariff must be universal to work and to be even remotely legal, which means any car made overseas and sold in the US has to have the tariff.
Will this happen or is the Furher targeting Mexico because they are dirty illegals? Sadly it is more likely the latter.

Does not change the fact that, any company hit by this kind of punishment will have to make a judgement on if the US market is worth the risk. Countries will have to figure out if punishment of US companies is needed, even for those making the product in Europe.
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You are right, it seems. Countries might have to decide. The decision will be painful in some cases and most so in countries that have been putting themselves first in commerce and free riding international security. They will have many decisions to make.

I have been following this regards Germany and participating to an extent. Here it will be very difficult. The whole society and social system is built around a one sided export oriented economy and free riding the security necessary to undertake it. This has been well known or at least it had been pointed out for decades. During the past 6 or 10 years you could see the realization in Germany dawn among the political elite. Only no American president did any thing robust for a variety and changing reasons. It was never in among the first priorities.

For export economies this will be difficult. For Germany again, this comes. On top of the realization that the economic model is destroying the Euro Area and that the security stance has endangered members of the EU on the "Eastern Front". As the economy is doing fairly well just now profiting from the far too low interest rates and currency exports are bubbling, while its neighbours stagnate.
 
Partsguy57 said:
Maybe, curious, how many millions have you made? How many big deals have you put together?? Saying is one thing and doing is another. What would you rather have him say? Carry business as usual?? How has that worked out in the last 40 years or so???

Sent from my SM-G920R4 using Tapatalk
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If you think starting a trade war is the way to make America great again...maybe you should research Smoot-Hawley.

https://en.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act

There is a good reason why every President since at least Nixon thought a trade war/massive tariffs was a bad idea...because no one wins but the rich.


I think he should cut spending (including welfare AND the military) AND cut taxes across the board AND end corporate/business taxes AND simplify the tax code so everyone can do their taxes in five minutes or less AND balance the budget AND cut red tape/regulations AND end corporate/bank bailouts AND end/neuter the Fed so American corporations can look at fundamentals again instead of spending all their time wondering what the Fed will do next. That is my list of suggestions for more jobs.

But starting a trade war is idiocy. Last time America did that - the Great Depression started within a year.
 
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DA60 said:
If you think starting a trade war is the way to make America great again...maybe you should research Smoot-Hawley.

https://en.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act

There is a good reason why every President since at least Nixon thought a trade war/massive tariffs was a bad idea...because no one wins but the rich.


I think he should cut spending (including welfare AND the military) AND cut taxes across the board to balance the budget, cut red tape/regulations and end/neuter the Fed so American corporations can look at fundamentals again instead of spending all their time wondering what the Fed will do next.

But starting a trade war is idiocy. Last time America did that - the Great Depression started within a year.
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I agree with what you said other then the trade war part. He hasn't started anything yet. I'm a small fry little property developer/ owner. I own into the 7 figures at this point and I learned a long time ago negotiations only go one way. You start high and at that point you can only go down, or you start low and you can only go up. Trumps bread and butter is the deal. Saying one thing and ending up in a far different place is quite normal. Now if it leads to a trade war I don't think that would be such a good deal I think trump is well aware of that fact. Good grief think about it when you are say buying a house and want the best deal possible do you start at their asking price?? I have a buddy I can't be around when he is working a deal, he calls it "grinding " them down and he is a master at it. ( it's so ugly when it's going down I'm to embarrassed to be around) but you know what ? He always comes out on the winning side of things. Let's see what comes out of the " ugly " it may surprise you.

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I find it so funny how the left supports the elimination is US union factory jobs, favoring the below minimum wage overseas jobs and workers.
 
Cryptic said:
How reasonable it is depends on the other conditions. My guess is that Trump is going offer BMW a choice:

A. Build cars in Mexico with far cheaper labor costs, sell them on the US market and pay a tariff
B. Build cars in the USA to sell on the US market tariff free (they already do)
C. Build cars in Germany where labor costs are corespond to US labors costs. Sell them on the US market tariff free.

I think this would be very reasonable choices.
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This simply amounts to punishing Mexico because they're able and willing to provide labor at lower cost, and punishing a non-US company because they choose to lower their cost of production (which benefits US consumers) by shopping for the lowest labor cost. Doesn't sound reasonable to me.

I'm in favor of making more things in America, and having more jobs in the US for making things. Trump makes the claim that we're losing those jobs because other countries are taking unfair advantage of us, but I've yet to hear him give a single detailed example of how unfair advantage has been taken, and how he would counter that in a fair way.

Keeping American jobs with American companies in America has some rationale, but I don't see the rationale for dictating where non-American companies should source their labor.

Bottom line is that our American companies and workers need to be competitive with global competition. Conservative principles call for Americans to stop playing the victim and earn what they seek on the basis or hard work and merit. We may need to improve our quality and productivity, and some of our workers may need to accept lower wages in order to compete, rather than acting entitled to higher wages which are uncompetitive. If they don't like those wages, they need better themselves to get better jobs. The market determines what hourly rates are appropriate for each job, and market conditions change over time as the world changes.
 
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