Carmakers See $18 Billion Wiped Out by Trump's Mexico Threat

[left-of-center2012]

The automotive industry is bearing the brunt of trade-war crossfire again as U.S. President Donald Trump threatens to slap tariffs of as much as 25% on goods from Mexico, a key production hub for carmakers from Mazda Motor Corp. to General Motors Co.

Mexico is the largest source of U.S. vehicle and auto-parts imports, meaning tariffs would increase costs for virtually every major manufacturer. In late night tweets Thursday, Trump warned tariffs would start at 5% on June 10 and increase to 25% on Oct. 1 unless Mexico stops immigrants from entering the U.S. illegally.

A dozen of the world’s largest automakers -- including Ford Motor Co., Toyota Motor Corp. and Volkswagen AG -- lost about $18 billion in market value by the start of regular U.S. trading Friday. The Bloomberg World Auto Manufacturers Index slumped as much as 2.2% to the lowest intraday since July 2016.

“Tariffs will mean higher price tags on cars for sales in U.S. and that will hit sales,” said Seiichi Miura, an analyst at Mitsubishi UFJ Morgan Stanley. A 25% tariff would be worth $86.6 billion annually, which “could cripple the industry and cause major uncertainty,” Emmanuel Rosner, an auto analyst for Deutsche Bank, wrote in a report Friday.

https://www.bloomberg.com/news/articles/2019-05-31/japanese-automobile-stocks-drop-on-trump-s-mexico-tariff-tweet?srnd=premium

[beachbum bob]

1. what happens when mexico plays the cards they have? Easily send US into a tail spin

[Lars39]

2. U.S. citizens will bear the brunt of these tariffs.

[underpants]

3. Don't they have entire production plants where they just flip a switch and start manufacturing?

Don’t blame Trump for your lack of planning, he’s got his own lack of planning to deal with.

[Wellstone ruled]

5. It takes a couple years to

completely built a assembly plant. And now with Tariff's in place,just the cost of Machinery just went up 25%. And it takes six or more months to staff up a operation . So,time line would be three years at best and by that time our economy would be so friggin shot,the new plants would never become viable.

[Quemado]

10. The Lordstown plant appears to be still available, but as the previous poster mentions

it would take a lot of money and time to get it up and running. For example, the New York Times reported that prospective buyer for the Lordstown plant in Ohio "would have to raise at least $300 million to get Lordstown running again." https://www.nytimes.com/2019/05/28/business/economy/trump-gm-workhorse-lordstown.html?action=click&module=News&pgtype=Homepage

Granted, the prospective buyer for the Lordstown plant wants to make electric trucks. Presumably, the re-tooling costs for electric trucks is higher than re-tooling costs to make conventional cars and parts.

[czarjak]

4. "I alone can fix it"

"I whine until I get my way" Who knew ?

[Golden Raisin]

6. Putin laughing his ass off.

[Brainfodder]

7. Just part of him treating the U.S.A. like a business!

Trouble is, allegedly a grifter, and thus not a business man at all, being a strong possibility, and thus pushing ALL boundaries, including, but not limited to our constitution!

We are already at war within and it's now at some level, kind of sick?

MSM feels more harm than good lately, same for social media?

Meanwhile, smoke appears in the form of litigating abortion rights, AGAIN?

[Initech]

8. These fuckers are going to crash the economy and trigger a second Great Depression.

And the people who elected this monster are OK with it!

[Buckeyeblue]

9. Cars will go up 25%

People who need a car will still buy. They will pay more, which means higher monthly payments. Less disposable income will mean other industries and services will suffer.

[ProudLib72]

12. My cousin used to work for BMW in marketing up until a couple years ago

I talked to him in 2016 about car sales. He told me that there was absolutely no money to be made in new car sales because the profit margin was slim to none. All the money was in used cars.

Let's take that and extrapolate into a market where the average cost of a new car is 25% higher than before. Sure, there will still be the very few who buy a new car every three years, but an increasing majority are going to keep their cars longer. Also, when it comes time to look for a new car, those pre-owned models are going to look mighty appetizing.

[Buckeyeblue]

13. Same problem for the buyer

Buying a new car is a waste of money because of how quickly the value depreciates. But it's getting tougher to find the used car that you want as people are holding onto their cars longer.

Car ownership in general sucks.

[live love laugh]

11. Two words: Treasonous and Union-busting

I’m wondering if the Republicans’ heretofore undetermined strategy is to fuck things up so bad for everybody that they will accept anything.