Trump warned automakers not to raise prices after his tariffs and be happy how ‘great’ they are
Trump warned automakers not to raise prices after his tariffs and be happy how ‘great’ they are
Trump reportedly hosted a call in early March with auto CEOs before he made the 25 percent tariffs official this week
Summary
Trump warned automakers not to raise prices after announcing a 25% tariff on imported vehicles starting April 3, claiming the tariffs would be "great" and benefit U.S. manufacturing.
Industry leaders, including GM, Ford, and Stellantis CEOs, expressed concerns about inevitable price increases, with experts warning tariffs could add thousands to car costs.
Auto suppliers stated that absorbing tariffs is impossible, and dealers fear affordability challenges for consumers.
While the United Auto Workers union support the move as a job creator, trade groups predict higher prices and fewer manufacturing jobs.
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Let's do some overly simplistic bad economics just for fun. Let's suppose that the American car companies are not hurt by the tariffs because those only target foreign car companies. Now all the foreign cars are 25% more expensive. This raises the demand for domestic cars. If the domestic car companies are trying to make money, they will jack up their prices 24%. And what are we told? Something about how they have duty to their shareholders? ... Donald is having fun living in his dream world.
are they even able to produce the parts domestically?
Not for a few years at least, if ever. And building this capacity costs money they will want to recoup.
The idea behind tariffs is you take the money earned by taxation on foreign goods and invest it in domestic production.
Except Trump leaves the second part out completely. He should be announcing large subsidies for American auto companies to bring those jobs back to the US but he's not.
He's going to find a way to siphon the money to himself and his magnificent 7 buddies.
Tariff then invest the proceeds into domestic production. Why is he leaving the second part out?
The idea behind tariffs is you take the money earned by sale of foreign goods and invest it in domestic production.
Except, due to Trump's lashing out randomly at the rest of the world, the world is turning its back on American companies and American made products.
Tariffs at least historically have been used to mess up the economy and prepare the population for a new deal.
Building capacity costs a ton of money and with the constant flip flopping on tarrifs there's a lot of hesitancy to break ground.