Car prices to rise due to tariffs and certain vehicles possibly ...

[edyvw]

It opened in 2005, and they were building Sante Fe in 2007. Sante fe was specific designed for USA market. They started making other vehicles first - smooth out operations and continued to do so. Its normal for plants to make multiple models - but it was put here pretty specifically to avoid that tax.

Toyota plant in Mississippi was supposed to make Highlander, but they started in 2007 and after the GFC switched to Corrolla - which has continued. Plans change I guess.

Nissan Smyrna plant originally started making Nissan pickup. They have made many other vehicles there always including altima and maxima. I think they currently make 4 models - Rogue, Pathfinder, Altima, Maxima and one something??

BMW started making Z series and 3 series cars but it was quite a small plant back then. When BMW decided to make SUV's they greatly expanded the plant - well really 2 plants now - its now BMW's largest and only makes SUV's currently.

If you ship a SUV / truck / Van into USA there is 25% tarriff - has been since ww2. Nafta was excluded. I think Canada has had a special deal forever - well till monday.

Ford with "transit connect" would put seats in them, ship them into USA and call it passenger car to get through customs, then remove the seats and sell as commercial. They got fined $365M. https://www.justice.gov/archives/opa/pr/ford-motor-company-agrees-pay-365m-settle-customs-civil-penalty-claims-relating#:~:text=Ford Motor Company has agreed,the Justice Department announced today.

I know what they built. I worked with them on some projects in Montgomery. Santa Fe, as you said, came later, but it was, for a long time, an afterthought as the crisis in 2008 pushed people to buy smaller vehicles. But still, Santa Fe would never be hit by truck tariffs. SUV's are not subject to that. Land Cruisers, or Touaregs or Q7's, were never subject to the truck tariff. Mazda B? Yes. VW Amarok? Yes. Truck tariffs did make some manufacturers build some facilities, but they are far from being the sole policy responsible for the car manufacturing boom in the Southeast or, generally, being responsible for foreign companies moving production here. Honda started building the Accord, and Toyota Camry when sedans ruled the market. I am not sure the manufacturing boom in the Southeast has anything to do with that. There are numerous manufacturing companies in the Southeast that don’t have anything to do with direct vehicle production or absolutely anything, from medical equipment to steel mills (Thyssen-Krupp). I mean, Alabama landed the first Airbus assembly outside the EU. Globalization was good for the Southeast. I mean, BMW is largest exporter of vehicles from the US If the EU imposes blanket tariffs like we did, SC will suffer. However, it seems the EU might target the tech sector and Tesla with specific tariffs and taxes. Michelin from SC exports a lot of tires to EU, as well as ZF transmissions.
Like always, there are winners and losers. Those who didn’t adjust to new realities lost when the world sped up globalization in the 1990s. Those that did, won. The same happened before during big economic shifts, during industrialization etc.

 

[SC Maintenance]

I know what they built. I worked with them on some projects in Montgomery. Santa Fe, as you said, came later, but it was, for a long time, an afterthought as the crisis in 2008 pushed people to buy smaller vehicles. But still, Santa Fe would never be hit by truck tariffs. SUV's are not subject to that. Land Cruisers, or Touaregs or Q7's, were never subject to the truck tariff. Mazda B? Yes. VW Amarok? Yes. Truck tariffs did make some manufacturers build some facilities, but they are far from being the sole policy responsible for the car manufacturing boom in the Southeast or, generally, being responsible for foreign companies moving production here. Honda started building the Accord, and Toyota Camry when sedans ruled the market. I am not sure the manufacturing boom in the Southeast has anything to do with that. There are numerous manufacturing companies in the Southeast that don’t have anything to do with direct vehicle production or absolutely anything, from medical equipment to steel mills (Thyssen-Krupp). I mean, Alabama landed the first Airbus assembly outside the EU. Globalization was good for the Southeast. I mean, BMW is largest exporter of vehicles from the US If the EU imposes blanket tariffs like we did, SC will suffer. However, it seems the EU might target the tech sector and Tesla with specific tariffs and taxes. Michelin from SC exports a lot of tires to EU, as well as ZF transmissions.
Like always, there are winners and losers. Those who didn’t adjust to new realities lost when the world sped up globalization in the 1990s. Those that did, won. The same happened before during big economic shifts, during industrialization etc.

The ruling has gone back and forth with the trade commission - ie is a CUV and SUV or not. However when CUV's or passenger SUV's first came about - the chicken tax was applied, which lead directly to these plants.

2015 article : https://www.ibtimes.com/chicken-tax...d-see-more-small-pickups-us-market-if-1988363

"The chicken tax encouraged foreign companies over the years to set up production lines in the U.S. for larger, more profitable light trucks, including the Honda Ridgeline (made in Lincoln, Alabama), the Nissan Titan (produced in Canton, Mississippi) and the Greer, South Carolina-made BMW X5."

 

[shortyb]

The Kia factory in GA and Hyundai factory in AL are there ONLY because of the chicken "tax", which is a 25% tarrif that has existed since WW2. Look it up.

They build SUV's in those plants - to avoid the tariff on light "trucks" and vans.

Same reason BMW builds the "X" series in SC. Same reason Toyota builds pickups in Mexico - who was exempt from the chicken tax due to Nafta or whatever its called now.

All those companies import sedans, etc. - although in some cases they also make sedans in the same plant, but the plant would not be there not for the chicken tax.

Fun fact - the two BMW assembly lines in SC are flex lines. They could make 3 and 5 series Sedans here without much trouble if they want.

Same with VW Chatanooga. Built originally for US Passat production, but has flex enough to produce just about any model. And they choose an EV .

 

[edyvw]

The ruling has gone back and forth with the trade commission - ie is a CUV and SUV or not. However when CUV's or passenger SUV's first came about - the chicken tax was applied, which lead directly to these plants.

2015 article : https://www.ibtimes.com/chicken-tax...d-see-more-small-pickups-us-market-if-1988363

"The chicken tax encouraged foreign companies over the years to set up production lines in the U.S. for larger, more profitable light trucks, including the Honda Ridgeline (made in Lincoln, Alabama), the Nissan Titan (produced in Canton, Mississippi) and the Greer, South Carolina-made BMW X5."

Honda Ridgeline would fall under that. Again, Land Cruiser, Touareg, Q7, for example, were not part of that (and X5 would not be too). For example, Audi has imported Q7 from Slovakia since 2005 to the US. Mercedes would be here; I think, differently because the first ML was a body on frame. I think those were things that you referred as back and forth. What actually constitute a truck? Is SUV body on frame a truck? That is why recently there was no tariffs on LC. Also, as you pointed out Z3 was first made in Spartanburg. There was no any other reason to built it in the US, other than the fact that building it in the market that will absorb most units makes most sense. The same applies to the X5. WHen first X5 was built, it was popular in Europe, but nothing like the US. So, why not building it in the primary market?

But that is absolutely irrelevant to the greater picture about tariffs. Globalization made huge parts of the US much wealthier than before. It was those who never could or were not willing to adjust to the new realities, that declined.

 

[Dave Hess]

I read somewhere that CarMax is increasing prices on used imports.

As if their pricing on vehicles was crazy to begin with.

 

[andrew_j]

Will this result in parts being made in the USA?

Result in USA part makers to match pricing of raised prices on imported parts or whatever they make…..

 

[SC Maintenance]

Honda Ridgeline would fall under that. Again, Land Cruiser, Touareg, Q7, for example, were not part of that (and X5 would not be too). For example, Audi has imported Q7 from Slovakia since 2005 to the US. Mercedes would be here; I think, differently because the first ML was a body on frame. I think those were things that you referred as back and forth. What actually constitute a truck? Is SUV body on frame a truck? That is why recently there was no tariffs on LC. Also, as you pointed out Z3 was first made in Spartanburg. There was no any other reason to built it in the US, other than the fact that building it in the market that will absorb most units makes most sense. The same applies to the X5. WHen first X5 was built, it was popular in Europe, but nothing like the US. So, why not building it in the primary market?

But that is absolutely irrelevant to the greater picture about tariffs. Globalization made huge parts of the US much wealthier than before. It was those who never could or were not willing to adjust to the new realities, that declined.

Ridgeline and X5 were in fact - the article specifically outlines it. The article was from 10 years ago - things have changed since. When "CUV" were first coming into fruition, trade department treated them as "SUV". The rulings have gone back and forth.

To your point - what is the difference between truck and SUV and CUV for tax purposes? For example I think the 2wd FJ cruiser was not subject, but the 4wd version was at one point. Its up to whatever the agency feels like at the moment.

And now the new Tarif's are here - so there you go - laws change. They may change again by Monday

the BMW plant specifically was built in 1994. 2 years after USSR collapse. Remember "globalization" was simply a bribe to get everyone to fight the cold war. With the cold war over, everyone expected tariffs and globalization to change / end.

The last 20 years of calm were likely the anomaly.

 

[mva]

The alternative? I keep my vehicles as long as possible and buy as little as possible to spend as little as possible of my hard earned money until the adults show up again. Tariffs are a consumption tax and a disincentive to spend money, so consider me disincentivized!

This is good for you and less burden on the environment but, it will result in a global recession, if tariffs stay in place for very long. Everyone will lose.

 

[GON]

This is good for you and less burden on the environment but, it will result in a global recession, if tariffs stay in place for very long. Everyone will lose.

If tariffs are so bad, why do 170 countries have tariffs on every American made product they import?

As posted prior, Japan and the Republic of Korea rebuilt their absolutely collapsed and shuttered industrial capacities by using tariffs. Look at the manufacturing output of Japan and ROK today.

 

[JeffKeryk]

Result in USA part makers to match pricing of raised prices on imported parts or whatever they make…..

Don't forget to add in the increase in delivery and carrying costs, which will all be affected by the tariffs, to some degree. So even imports cost more. The increase in inventory carrying costs would be astronomical!
Cost runs downhill to the consumer.

 

[edyvw]

Same with VW Chatanooga. Built originally for US Passat production, but has flex enough to produce just about any model. And they choose an EV .

Ridgeline and X5 were in fact - the article specifically outlines it. The article was from 10 years ago - things have changed since. When "CUV" were first coming into fruition, trade department treated them as "SUV". The rulings have gone back and forth.

To your point - what is the difference between truck and SUV and CUV for tax purposes? For example I think the 2wd FJ cruiser was not subject, but the 4wd version was at one point. Its up to whatever the agency feels like at the moment.

And now the new Tarif's are here - so there you go - laws change. They may change again by Monday

the BMW plant specifically was built in 1994. 2 years after USSR collapse. Remember "globalization" was simply a bribe to get everyone to fight the cold war. With the cold war over, everyone expected tariffs and globalization to change / end.

The last 20 years of calm were likely the anomaly.

I think article was wrong on X5. They might take it as an example, but no vehicle of that nature, unibody SUV was targeted under those tariffs. Touareg was current at that time as well as Q7, and both were made in Bratislava.

 

[edyvw]

If tariffs are so bad, why do 170 countries have tariffs on every American made product they import?

As posted prior, Japan and the Republic of Korea rebuilt their absolutely collapsed and shuttered industrial capacities by using tariffs. Look at the manufacturing output of Japan and ROK today.

The tariffs range 1.5 to 5% at max. We always did the same.

 

[JeffKeryk]

If tariffs are so bad, why do 170 countries have tariffs on every American made product they import?

As posted prior, Japan and the Republic of Korea rebuilt their absolutely collapsed and shuttered industrial capacities by using tariffs. Look at the manufacturing output of Japan and ROK today.

Tariffs have a place. Global tariffs is another story. The tariffs, a consumption tax, will hurt everyone but more so the poorer classes.

We live and benefit from the global economy. There is no way we can produce all the things we need, nor would we want to.
I could mow my own lawn, but I have other things to do which are more beneficial to me. Of course, I don't have a lawn, so there's that...

 

[4WD]

Tariffs have a place. Global tariffs is another story. The tariffs, a consumption tax, will hurt everyone but more so the poorer classes.

We live and benefit from the global economy. There is no way we can produce all the things we need, nor would we want to.
I could mow my own lawn, but I have other things to do which are more beneficial to me. Of course, I don't have a lawn, so there's that...

I think people are hung up on the tip of the iceberg and we can’t discuss the biggest part we are on collision course with …

 

[4WD]

And then it will once again make sense to turn rotors instead of replacing them.

This seems small to some - but a classic example of how we created a disposable (everything) society …
I’ll never forget the day I kept glancing over at the next checkout where the only older man was bagging groceries …
It finally hit me - Jim of Jim’s TV Repair …
Maybe we won’t recondition TV’s - but many things you can …

 

[JeffKeryk]

People seem to think we are holding all the cards; we are not. No one is.
America based companies use imported materials and technology via the supply chain. No one operates in a vacuum.

Say you have a company that exports... You will likely get hit with reciprical tarrifs. And/or your customers may choose to use other sources. You just may be outta business.

In Economics, "opacity" refers to a lack of transparency or clarity, where information about assets, markets, or economic activities is not readily available or easily understood, potentially leading to inefficiencies and instability.

Does anyone think they have any idea the complexities of world economics? Please... We simply don't know what we don't know.
Add to that the uncertainty trading partners now have based on the loss of America's trustworthyness.
This bravado is insanity.

 

[PWMDMD]

This is good for you and less burden on the environment but, it will result in a global recession, if tariffs stay in place for very long. Everyone will lose.

I know, and yet, I'm not going to spend MY precious resources needlessly when it's clear my business and my livelihood could be impacted by public policy, I'm going to do the rationale thing and I'm going to conserve them.

Lol...it's almost like there's psychology that needs to be considered when policy is being designed and implemented. Hmmmm....who'd a thunk it?

 

[PWMDMD]

People seem to think we are holding all the cards; we are not. No one is.
America based companies use imported materials and technology via the supply chain. No one operates in a vacuum.

Say you have a company that exports... You will likely get hit with reciprical tarrifs. And/or your customers may choose to use other sources. You just may be outta business.

In Economics, "opacity" refers to a lack of transparency or clarity, where information about assets, markets, or economic activities is not readily available or easily understood, potentially leading to inefficiencies and instability.

Does anyone think they have any idea the complexities of world economics? Please... We simply don't know what we don't know.
Add to that the uncertainty trading partners now have based on the loss of America's trustworthyness.
This bravado is insanity.

It's mind boggling this attitude that Americans have about our importance in the world. We were only important in so far as other countries benefitted from our policies and now that they are going to be hurt by our policies, they will just unite, reconsider their relationships with us and other countries, and move on from us like a bad ex-boyfriend.

 

[TiGeo]

ALL HAIL MEGATRON

 

[eljefino]

Earlier today I read an article that Nike is very upset over the tariffs on Vietnamese exports into the U.S.

Note I don't pay for name brand athletic shoes.

The article stated Nike's Air Jordan's are made in Vietnam and are retailed in the U.S. at $180 a pair. The article calculated the tariffs on Air Jordans would rise $18 per pair. Further, the article estimated Nike's gross cost, including transport into the U.S. for a pair of Air Jordans is in the $19-$28 USD range.

I bet Air Jordan's will still cost $180 as that's what the market will bear. The "value" in the imported container of shoes should just be the raw materials plus the labor of the sweatshop workers.

They could probably bring in mostly-made shoes, call them "blanks worth $18", pay a US worker to add the laces, pay $2 in tarriff taxes, then sell them for the normal price.

The value in a set of Air Jordans is the brand recognition and celebrity endorsement.

I expect i-phones will behave similarly. Import an unformatted phone, add the US-based software here, "which is where the value is", pay tarriff on the motherboard and guts that are a small percentage of what buyers pay for.