{"id":3715,"date":"2025-03-14T09:01:56","date_gmt":"2025-03-14T09:01:56","guid":{"rendered":"https:\/\/friscotimes.org\/?p=3715"},"modified":"2025-03-14T09:01:56","modified_gmt":"2025-03-14T09:01:56","slug":"opinion-trumps-tariff-threats-are-driving-carmakers-crazy","status":"publish","type":"post","link":"https:\/\/friscotimes.org\/?p=3715","title":{"rendered":"Opinion | Trump\u2019s Tariff Threats Are Driving Carmakers Crazy"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div data-testid=\"companionColumn-0\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Since returning to office, Donald Trump has embarked on a shock-and-awe policy blitz that has paralyzed not only his political rivals but also an automotive industry that had largely welcomed his return.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Carmakers may care little about Elon Musk\u2019s government job cuts, or the United States taking Russia\u2019s side against Ukraine. Efforts to eradicate D.E.I. policies are a little trickier, but auto executives and dealers have skillfully navigated such situations in the past. Still, this trade war \u2014 and rapid sequence of policy flip-flops \u2014 is not what they envisioned in a second Trump presidency.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cSo far what we\u2019re seeing is a lot of costs and a lot of chaos,\u201d <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/02\/11\/business\/ford-trump-tariffs-electric-vehicles.html\" title=\"\">said<\/a> Ford\u2019s chief executive, Jim Farley. Paul Jacobson, General Motors finance chief, <a class=\"css-yywogo\" href=\"https:\/\/www.cnn.com\/2025\/02\/26\/business\/tariffs-trump-wall-street-journal\/index.html\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">told investors<\/a> that while a short tariff spat would be easily manageable, a \u201cpermanent\u201d one would require billions of dollars in investment that might prove unneeded as soon as Mr. Trump\u2019s term is over. \u201cWe can\u2019t be whipsawing the business back and forth,\u201d he said at a Barclays conference.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Making cars requires large investments, committing to products that last longer than presidential administrations, and factories that typically operate for decades, even generations. Before Mr. Trump\u2019s election last year, auto folks were grousing about how hard it is to plan and invest when policies can change drastically every four years. Now they\u2019re seeing the rules of the economy shift every four weeks \u2014 or four days.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-1\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">To sum up the past six weeks: First, Mr. Trump announced plans for 25 percent tariffs on Canadian and Mexican imports \u2014 flushing away the trade agreement he negotiated in his first term. For decades, the auto industry has been investing billions in developing an efficient supply chain throughout North America. When Mr. Trump announced the levies on vehicles, engines and other components from Canada and Mexico, he jeopardized that entire project.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Then came the deadline dithering. First, the tariffs were set to take effect on Feb. 1, then Feb. 4, then March 4. With the stock markets tanking, Mr. Trump gave the auto industry another one-month delay for most automotive imports, which was <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/03\/06\/us\/politics\/trump-mexico-tariffs-suspended.html\" title=\"\">expanded<\/a> the next day to a vast array of other goods, from avocados to air-conditioners.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The 29 auto assembly plants in Mexico and Canada provide about a quarter of the cars and light trucks that Americans buy in a given year, including popular models such as G.M.\u2019s Chevrolet Silverado, Ford\u2019s Bronco Sport, and Toyota\u2019s RAV4 and Tacoma. If these tariffs do go into effect, they alone could add an estimated $4,000 to $10,000 to typical vehicle prices, which are already up about $10,000 from before the pandemic.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Now April 2 looms as the dreaded T-Day, not only for North American trading partners, but also for the threatened \u201creciprocal\u201d tariffs that seem to be aimed at Europe, South Korea and Japan. Otherwise, their cars would benefit from the price hit American automakers will suffer under the tariff regime for products from Canada and Mexico. Now half of the market is facing huge taxes right after April Fools\u2019 Day.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Many automaker executives and most auto dealers were highly wary of President Joe Biden and the Democratic Party\u2019s interest in addressing climate change. Mr. Biden\u2019s Environmental Protection Agency demanded automakers find a way for sales of electric vehicles to represent at least 31 percent of the market by 2030 (up from 8 percent in 2024) and it kept in place a waiver allowing California to set its own emissions standards, which Gov. Gavin Newsom used to impose a ban on the sale of new gasoline-powered light vehicles in California by 2035.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-2\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Dealers were outraged by a Biden Federal Trade Commission rule, not yet in effect, that was intended to make pricing more transparent for shoppers; dealers complained that it was unwieldy and would add at least an hour to the already-too-long sales process. They resented the existence of the Consumer Financial Protection Bureau, which has purview over auto lenders and questioned dealerships\u2019 practice of marking up loans they help place.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">And although the Biden administration was offering huge manufacturing and purchasing incentives meant to help the industry catch up with China on electric-vehicle development, anxiety lingered. Would the big investments spurred by Mr. Biden\u2019s policies really pay off? Why risk it? The industry \u2014 and America \u2014 survived four years of Mr. Trump once, executives and investors thought, and we can do it again.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">But is survival enough? Trump\u2019s tariffs will likely obliterate automakers\u2019 <a class=\"css-yywogo\" href=\"https:\/\/www.youtube.com\/watch?v=r1aDcwFsfQk\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">profits<\/a>, an analyst at Barclays projected. Stock market indexes that soared upon Mr. Trump\u2019s election have crashed as he has shown no signs of backing off the tariff strategy, even if it risks a recession.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The administration\u2019s goals with these tariffs are not clear. The original rationale was that Canada and Mexico weren\u2019t doing enough to stop fentanyl and undocumented migrants from coming into the United States. And the original one-month delay for the tariffs was in appreciation for their gestures, which included Canada naming a \u201cfentanyl czar\u201d and Mexico sending 10,000 troops to the border to fight the flow of drugs and migrants. But none of that has anything to do with the auto industry \u2014 and a one- or two-month delay is nowhere near enough time to adjust supply chains or move an auto factory.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Paradoxically, the election \u2014 and the peaceful transfer of power \u2014 was supposed to end the political paralysis that had been holding back the auto industry through much of last year. Automotive executives openly said they were delaying decisions until the country\u2019s regulatory direction was clear. Dealers said that consumers were wary of committing to new vehicles amid the uncertainty.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-3\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">They liked the sound of \u201cDrill, baby, drill.\u201d They didn\u2019t think they would get \u201cTariff, baby, tariff.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Until trade policy stabilizes, they better get used to the whipsaw. And they\u2019ll mostly stand pat, waiting to see what future they are investing in.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Since returning to office, Donald Trump has embarked on a shock-and-awe policy blitz that has paralyzed not only his political rivals but also an automotive industry that had largely welcomed&hellip;<\/p>\n","protected":false},"author":531,"featured_media":3716,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[7],"tags":[4882,4883,1047,57,874,4656,750],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - 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