By on June 29, 2018

Automakers are not thrilled with the White House’s current interest in automotive tariffs. With factories scattered across the globe, no major manufacturer would go untouched by the proposed increases in import duties or the retaliatory tariffs foreign governments may issue in response.

There’s a lot to lose from a financial perspective. According to a recent analysis from Evercore ISI, Fiat Chrysler would take an annual hit of $866 million if the United States placed a 25-percent import tariff on cars. Considering that other automakers stand to lose at least that much, it’s unsurprising they’ve begun raising their corporate voices over the matter.

Granted, the FCA example is a worst-case scenario for that particular brand, but even a lesser tariff would see a profit loss of hundreds of millions. For an automaker like Mazda, the loss would be far worse.

Automakers have begin making a stink about this. The Association of Global Automakers, a Washington-based trade group representing car manufacturers and parts suppliers, called the United States’ tariff proposal “the greatest threat to the U.S. automotive industry at this time.”

Toyota has already submitted comments to the Commerce Department rejecting the tariff proposals. “A 25 percent tariff on automotive imports, which is just a tax on consumers, would increase the cost of every vehicle sold in the country. Even the Toyota Camry, the best-selling car in America, made in Georgetown, Kentucky, would face $1,800 in increased costs,” Toyota said.

According to Bloomberg, Mazda followed up with statements of its own on Thursday. It asked the department to “reject the premise that auto imports are a threat to national security,” while simultaneously issuing a reminder that it employs 32,000 Americans citizens who work for Mazda via the brand’s dealerships.

The company doesn’t employ factory workers in the country because it doesn’t manufacture vehicles inside the U.S. Until it manages to finish its factory in Alabama, all of Mazda’s products have to be imported and, because of that, its entire lineup would be subject to import fees.

“A tariff is a tax and it will be paid by American consumers,” Mazda said. “It will significantly increase the cost of every new vehicle sold in America, regardless of where it is built.”

Presumably, the Commerce Department knows what’s at stake already. It keeps track of the total value of imported vehicle’s every single year and there is a lot of money tied up. Almost $40 billion dollars worth of car came into the United States from Japan alone last year.

[Image: Mazda]

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94 Comments on “Trade War Watch: Mazda Joins Toyota in Condemning U.S. Tariff Proposals...”


  • avatar
    Sub-600

    “A tariff is a tax and it will be paid by the American consumers,” Mazda said. Not if they stop buying Mazdas. D’oh!

    • 0 avatar
      Big Al from Oz

      Like the chicken tax.

      And America will go back producing crappy cars. You accel at that.

      • 0 avatar
        "scarey"

        DRINK ! BigalFromOz said “chicken tax” !

      • 0 avatar
        Peter Gazis

        @Big Al from Oz

        Australia doesn’t produce any cars. They accel at mining raw materials for the Chinese.

        • 0 avatar
          Big Al from Oz

          Peter,
          We do have manufacturing. 12% of our workforce in fact. The difference is we only manufacture what we are competitive at.

          What we can’t manufacture we import. Great system.

          Australia is a leading global commodity provider, agri and mining, this has given us a very high standard of living. This has also made us less competitive at manufacturing.

          It is working well for us and attempting to denegrate Australia about manufacturing displays your insecurity.

          We leave certain forms of manufacturing to less developed economies. The more they produce the richer they become and the minerals and red meat they want.

          Focusing on manufacturing is so 1960s. The richer economies are what is termed “Post Industrial”. We are service based economies. Australia does well with the service industry and export much tech for this industry to less developed economies.

      • 0 avatar
        Art Vandelay

        Excel…like the crappy Hyundai car from 25 years ago.

    • 0 avatar
      Astigmatism

      If consumers shift to buying American-made vehicles instead, then they wont be paying the 25% tariff to the government, but they will be paying a hugely inflated amount to whichever company they buy their vehicle from. That is specifically how tariffs are intended to work: by raising the price of competing foreign goods, the tariff allows the domestic manufacturer to raise its prices in a less competitive environment. This is one of the reasons pickup trucks have such obscene profit margins yet relatively few companies competing for those sales.

      • 0 avatar
        tnk479

        Toyota and Nissan both build full size trucks in the United States and if the reviews are to be believed, they just aren’t that great. The F-150 seems to win all the full size truck awards and the new GM twins and Dodge have full redesigns on sale soon that both look like better products than the Nissan Titan or Toyota Tundra.

        So I guess my question is, what is stopping big Japanese automakers from building trucks in the US and competing on equal footing? They already do it now.

        • 0 avatar
          Big Al from Oz

          tnk,
          But do they import cheaper more competitive vehicles into the US forcing US manufacturers of pickups to be more competitive?

          So, the chicken tax is screwing the US consumer and limits choice.

  • avatar
    28-Cars-Later

    “Mazda said. “It will significantly increase the cost of every new vehicle sold in America, regardless of where it is built.””

    Read: some in the industry will be directly impacted but most won’t, but as a industry we will gouge you regardless.

    • 0 avatar
      Big Al from Oz

      28,
      If costs rise due to material costs. Prices rise due to more expensive local content. How is the rise in price gouging.

      Man, I really thought your mind was more advanced.

      You really are showing all how Trump supporters are dumba$$ simpletons.

    • 0 avatar
      bullnuke

      No doubt prices will rise in the short term – the old “supply and demand” rule and and all that. Within a fairly short period with a fall off of sales due to pricing things would stabilize and the old incentives will return to hold manufacturer margins. Prices historically rise annually for vehicles; this would spike ’em up quicker in a short period and then back to the more normal level of year-over-year increases. Perhaps there would be a temporary rise in US-sourced raw materials but that would moderate with increased volumes. The weak and insignificant players such as Fiat and Mazda would likely disappear as pricing would be beyond the value of their vehicle offerings in the short term. Not really a big deal. The US is fully able to produce vehicles in-house at a somewhat higher price point due to higher labor costs/regulation. We are not limited in raw materials to opals, sheep, Vegamite, and wheat. If folks want to reduce dependence on off-shore sourced goods and services, they need to be willing to pay the price of living in an advanced society. It’ll be an interesting show if/when these tariffs come to pass.

      • 0 avatar
        Astigmatism

        “Within a fairly short period with a fall off of sales due to pricing things would stabilize and the old incentives will return to hold manufacturer margins.”

        Looked at margins on light trucks lately?

        • 0 avatar
          bullnuke

          Trucks are nuts. That’s where the money is made. A 25% tariff on other things may try to shift SUV’s/CUV’s/passenger cars the same way as trucks but, nah, I can’t see the same dynamic as trucks. Trucks are “whip-it-out-and-measure” items nowadays and rarely used for the proper purposes of trucks, more of a bauble to show-off. The manufacturers play to this for a reason. Won’t work on a Chevy Cruze or a Dodge Journey – prices on these and their ilk may rise but will rapidly stabilize.

          • 0 avatar
            tnk479

            Vehicles, homes, vacations, designer clothing, watches — it’s really not just trucks. America is for better or worse a consumer society. I find it all a bit over the top myself. I always wonder when I see people in their big, fancy rides, is that person saving enough for retirement?

      • 0 avatar
        Big Al from Oz

        bullnuke,
        The rises will remain until the anti competitive tariffs are removed.

        Where are all US made pickups in the global market? They are not competitive, expensive for the quality and capability they offer. And there is a global pickup truck boom occuring.

        Concentrating on an ever shrinking (proportional) US market will eventually kill the US auto industry.

        • 0 avatar
          "scarey"

          What killed the Aussie auto industry ? Oh, wait ! You don’t even HAVE one. You only have factories from Ford, GM, and Toyota . Where is the mighty Australian auto industry ? LOL ! Never had one ! LMAO !

          • 0 avatar
            Big Al from Oz

            We have a fantastic vehicle market. 1.2 million sold per year, equivalent to the US selling 18 million per year.

            We have the highest rate of performance vehicles per capita, sell more pickups per capita than any other country. Have a geater coice of vehicles than the US.

            If you like cars, trucks, etc come to Australia.

            Something the US can aspire to.

        • 0 avatar
          Art Vandelay

          The United States is part of the Global Market. Globally, no single vehicle sold more copies than the F Series pickup with the GM and FCA trucks being not too far behind. If those global trucks are so great, how come they don’t outsell the US trucks despite having literally every other country on the face of the Earth as a market. They just aren’t very good.

          And again, you talk about 12 percent of the Australian workforce being manufacturing. We’d call that statistically insignificant as the US Auto Industry ALONE is 1/3 the entire GDP of your country.

          For the record, US Companies put more vehicles on the surface of Mars than Australian companies built over the last few years. We will be just fine, but thanks for the concern.

          • 0 avatar
            Sub-600

            If I wanted a sweet Holden Commodore, I’d go to Australia. That and a rosewood boomerang for personal defense, just slip it under the driver seat.

  • avatar
    TW5

    If doing business in the United States is bad for your company, go home. The US citizenry isn’t going to let the trade deficit triple (again) over the next 15 years because some C-suite mercenaries might not get their incentive bonuses.

    Either fight for reciprocal liberalization and currency rebalancing or hire Americans. Those are the auto manufacturers options. Whining isn’t on the list of options.

    • 0 avatar
      28-Cars-Later

      Go long 3D printing.

    • 0 avatar
      Robbie

      Reciprocal liberalization may mean that Detroit goes bankrupt if imported pickups become a success. Easy to build, ancient technology. Do we really want to take the risk?

      • 0 avatar
        TW5

        CAFE says that risk will never happen. You’ve got to get a 5,500lb crew cab long bed to 23mpg combined. That requires active aero, start-stop, cylinder deactivation, and a litany of other expensive credits.

        Imported trucks are not really a threat to the US market anymore. They weren’t really a threat from the beginning, but we felt like sending a message to foreign automakers after our chickens got taxed.

        Also, the dollar would probably be half of its current value (due to our trade deficit) if foreign banks were not intentionally buying US treasuries, equities, real estate, etc to boost the US capital account.

      • 0 avatar
        DeadWeight

        Toyota, Honda & Nissan could ALL field full size 1/2 and 3/4 ton pickup trucks more reliable, robust and overall better than Ford, RAM AMD, especially Guangzhou-Guadalajara Motors (GM) if the wanted to, and could have for the last 20 years.

        That they did not was a choice that they realized would cause massive blowback as it would effectively bankrupt the U.S. Auto Industry, including much of the supplier base.

        It’s not as if it’s some crazy idea to think (or know) that Japanese automakers have the technical and actual know-how to produce such vehicles and undercut domestic makers pricing.

        There’s been a tacit agreement not to move too aggressively in doing so.

        And now the domestic automakers are fleeing from making/selling anything other than pickups, SUVs and CUVs in the U.S.

        A bunch of people will now b!tch and whine about how I’m crazy to suggest such a thing. Go!

        • 0 avatar
          DenverMike

          US Big 3 automakers could also build much better cars than Toyota, Honda, Nissan, etc, if they wanted to. They’re not exactly “Rocket Science”.

          It would take a huge initial investment, that’s for certain.

          This would bankrupt those Japanese brands, and I guarantee you there’s a lot LESS engineering and assembly logistics going into top notch unibody cars and sailing them out the assembly plant than successful fullsize pickups, full line, industrial/commercial/fleet to high end luxo.

          See I can suggest crazy things too, but not nearly as goofy as you.

          Yeah in a perfect world, an automaker could do it all, winning at all of it. But for now it’s not happening.

        • 0 avatar
          TW5

          @ Deadweight

          That may be true, but it’s not in the Japanese manufacturers’ best interest to put those 5,000lb behemoths on a boat and ship them across the ocean.

          Japan has virtually no energy supplies of their own, and few natural resources, but they insist on importing energy and raw materials to manufacture durable goods, like cars and heavy machinery. Then they import more fuel to ship their goods across the ocean. And the only way they can get people to buy these Japanese-built products is to buy USD so the JPY (thus import prices) stay artificially low. Unfortunately, this practice also drives up the cost of natural resource inputs.

          Everyone loses, particularly Japan who have a debt to GDP ratio similar to Greece. The Japanese automakers were always going transition to North American assembly. Our regulators merely realized it would take a bit of prodding to make it happen.

          • 0 avatar
            DeadWeight

            Japanese build watered down pickups, deliberately non’competitive, in U.S. facilities now.

            They build purposefully tepid offerings.

            They could change that equation with relative ease and in quick manner if they so wished.

            No shipping across oceans required.

          • 0 avatar
            DenverMike

            They may look similar at 100 yards, but Japanese OEMs build/design/engineer “pickups” exactly like they do cars. About zero customization or options variation.

            Take it or leave it.

            Simply attempting to compete with Big 3 fullsize pickups would take a complete restructuring of their traditional business ideals. That may be more difficult than anything else.

            The Big 3 make it look “easy”. If not committed to putting out 400,000 units minimum, and totally catering to fleets, industry and commerce, cheapskates and bottom feeders along the way, plus massive rebates/incentives, why even bother?

          • 0 avatar
            TW5

            @ DeadWeight

            Probably, but that’s not an imported vehicle. There would be little reason to shun a domestically-assembled Japanese pickup, particularly if they were following the general concepts outlined for NAFTA content.

            The ongoing issue is that manufacturers are importing automobiles and gaming the NAFTA rules, which put US workers and NAFTA workers at a disadvantage.

            It was really stupid of Toyota to complain publicly because it makes them look as culpable as Guangzhou Motors (or whatever you call them), though Toyota generally makes some of the most American cars for sale.

            Strategic misstep by them, and they will pay for it in the long run.

        • 0 avatar
          Art Vandelay

          Wait, are you saying Toyota didn’t go all in on the Tundra? The Titan, maybe, but the Tundra was a full on effort by Toyota to crack the fullsized truck nut. It was only after it failed to do so that they relegated it to its current position in the market which is basically where Ford had the old Ranger for many years.

    • 0 avatar
      Big Al from Oz

      Trumpbot5,
      WTF?

      Do you really believe the crap you put out?

      You are sad, very sad and sick indeed.

    • 0 avatar
      "scarey"

      @BigalFromMI6—England also has a large car market, They just don’t have any REAL carmakers. Just like Oz and Canada. England has Rolls Royce and Bentley- owned by the Germans, and Jaguar and Rover- owned by the Indians. Oz has GM, Ford, and Toyota. Canada has Chrysler, Ford, GM Hino, Honda, and Toyota, all owned by American or Japanese automakers. Maybe, one day, America’s automakers will all be owned by foreign companies. But NOT YET. So why are you bitching about America when your own country has its own problems. Like your Prime Minister giving Hillary Clinton $20 Million. Why would he do a thing like that ? And was it HIS OWN money, or TAXPAYER money ? The only reason that I care is that it sounds like he was trying to influence a high ranking employee of the U.S. government, which is ILLEGAL under U.S. law (and probably Australian law also.) Was that a BRIBE ? Like I said, I would not bring it up except that it involves a possible crime committed by an American Secretary of State and presidential candidate.

      • 0 avatar
        Big Al from Oz

        scarey,
        You can weak statements based on industry.

        You don’t see Australia and/or Canada fncking the world over like Trump.

        Imagine if Australia and Canada imposed a 25% export tax on commodities? I’d bet you’d say the Aussies and Canadians are trying to cause havoc and destroy America.

        • 0 avatar
          Steve From Japan

          The U.S. has one of the lowest tariff and non-tariff barriers anywhere.

          Japan, for example, imposes extremely high tariffs on many American commodities, including tariffs of as much as: 50 percent on processed beef products, 24 percent on poultry, 40 percent on dairy products, 661 percent on whey, 32 percent on fruit, 43 percent on juices, 1,000 percent on vegetables and pulses, 250 percent on wheat, 255 percent on barley, 21 percent on soybean oil, 600 percent on peanuts, 26 percent on processed products like coffee and 778 percent on rice.

          NOTE: That 778 percent Japanese tariff on rice is NOT a typo!

          • 0 avatar
            Big Al from Oz

            Steve,
            Your statement is factually totally inaccurate.
            1. The US leads the world with the most non tariff barriers.

            2. The US is NOT a free market economy. As I pointed out there are only 6 free market economies globally.

            3. And, of the mixed economies there are economies that mixed like the US that have more economic freedom.

            The US needs to liberalise its economy more.

            I find it odd at the amount of ill informed Americans who consider anything not American to be Socialist and lacking freedom.

            This is sad and maybe why the US is having trouble adjusting to a world where in many cases the US is not competitive enough.

            Its easier to blame others for the problems you have than put your head down, a$$ up and put an effort in. Compete and don’t expect the world to handicap or subsidise US failure.

          • 0 avatar
            markf

            “I find it odd at the amount of ill informed Americans who consider anything not American to be Socialist and lacking freedom.”

            You find it odd cause you don’t know what real freedom is

        • 0 avatar
          markf

          “You don’t see Australia and/or Canada fncking the world over like Trump.”

          Because neither country could, no matter how they tried………

          “fncking the world over like Trump”

          Translation: Policies that do not fit my impeccably Lefty worldview

          • 0 avatar
            Big Al from Oz

            mark,
            The logic can be applied to the US, either way.

            Imagine what would occur if Canada and Australia raised the costs 25% for commodities?

            Your response would be countries will buy elsewhere. The same applies to the US.

            What I’m pointing out is the US is disrupting the status quo and creating a toxic environment. This is not how to manage business or government.

            I really believe, globally business and governments are holding out until Trump’s and his goons demise arrives.

  • avatar
    Funky

    What is there to say about this? We average Americans will pay an extra, inflated, cost for whatever car we buy. But do the “bigwigs” care? Of course not. Because it doesn’t negatively effect the folks who are making these policies. It just effects us regular folk. Just hurry-up and buy your Mazdas, Toyotas, Fords imported from Mexico, Buick’s imported from China and Europe, Chevys imported from Canada, and Fiat Chrysler products imported from around the world, before the added costs kick in.

    • 0 avatar
      Big Al from Oz

      Funky,
      It will affect the bigwigs. This is where Trump is screwing up. He’s not only screwing the worker he’s screwing all in the US.

      Asylum material he is.

    • 0 avatar
      TW5

      The bigwigs are the only people getting screwed by this. The question is whether or not they vindictively screw the public because they are salty that Trump is blowing up their international trade scam.

      Chances are they will not screw the public, and they will move more manufacturing to the US or NAFTA, because noncompliance will put them at a competitive disadvantage. However, they are definitely going to throw a massive tantrum and make lots of threats and pollute the public discourse as a means of getting their way.

      It won’t work. They will eventually relocate manufacturing or they will start applying pressure on foreign leaders to remove tariffs and other trade barriers.

      • 0 avatar
        Astigmatism

        The article you’re commenting on is about them applying pressure to remove tariffs and other trade barriers.

      • 0 avatar
        Trucky McTruckface

        This. All the p*ssing and moaning about how these tariffs are going to pass high prices on to the consumer is just noise. Because they know that other, more competent manufacturers are going to figure out how to work around the tariffs and have a huge (yuge?) advantage in pricing power.

        Too bad for them. Figure out how to compete in the U.S. under the new trade paradigm or pull out of the market. Like anybody buys Mazdas anyway. And I guarantee Toyota will ultimately suck it up and keep selling rent-a-Camry LEs at the fire sale prices consumers are willing to pay. All of this should be a wash for American consumers and a win for American blue collar workers. I’ve said it before and I’ll say it again: Trump’s aiming these tariffs at the companies that are outsourcing US jobs at least as much as he’s aiming at the countries they’re outsourcing to. Companies that think they an offshore their workforce to reap big profits in America can FOAD, as far as I’m concern.

        Ask yourself what’s more important in the long run, saving $2k on some frumpy import nameplate sedan or incentivising the industry to gainfully employ Americans to assemble that car?

        • 0 avatar
          Tele Vision

          “Ask yourself what’s more important in the long run, saving $2k on some frumpy import nameplate sedan or incentivising the industry to gainfully employ Americans to assemble that car?”

          For 99% of buyers – most of whom buy as much as they can in a car – the former. Do you really believe that only Fords populate Ford assembly line parking lots? You’ll find more than a few Mazdas there, I’d wager, as well as several Camrys and Accords. Jingoism works as well as protectionism in this modern age and Trump is trumpeting both, to the detriment of the American worker – who also has to buy the stuff he or she makes. Figure it oot.

          • 0 avatar
            TW5

            @ Tele Vision

            That’s what we thought in the 90s; putting several thousand inefficient laborers out to pasture wouldn’t have lasting negative consequences for the nation. The economy would simply find a new task for those displaced people.

            Then we discovered our trading partners were aiming for several million US workers, and sagging wages would cause millions more (young people) not to bother with employment at all.

            Our inattentiveness back then, not only to global trade issues but also to domestic spending issues, sowed the seeds we are harvesting now. Bitter crop.

        • 0 avatar
          Astigmatism

          It’s odd that we’ve been told for years that taxes are bad and get passed along to the consumer and distort the free market and destroy American competitiveness, but all of a sudden taxes literally designed to distort the market and raise consumer prices – and retaliatory taxes designed to destroy American competitiveness – are no biggie and it’s our patriotic duty as Americans to suck it up and pay them.

          • 0 avatar
            Trucky McTruckface

            Yeah, it’s almost as odd as how we used to hear about the importance of buying American, backing union workers and the treachery of corporations that tried to sneak around having a American labor force earning a living wage – but all of a sudden the global competitiveness of those corporations is super important – and offshoring American jobs to protect their profits is something we all need to suck up and accept.

            I’ve been willing to accept that the politicians I’ve been supporting for years are bullish*tting wh*res for the elite. Why haven’t you?

          • 0 avatar
            Astigmatism

            Maybe you should stop voting for b*llsh*tting wh*res then, and try voting for someone who passed Econ 101 instead.

          • 0 avatar
            TW5

            @ Astigmatism

            It’s not odd. The cost of allowing the economy to evolve naturally shouldn’t have been unsustainable, but we didn’t anticipate foreign governments and US companies tag-teaming the American middle class. Their collaboration has nothing to do with the free market, and tariffs are a means to a political end, not free market interference.

            This is the conflict global companies have chosen for themselves. They have many reasons to be angry at the US electorate for sponsoring some of the dumbest regulations in history, particularly those governing US healthcare and public pensions, but corporations were never going to succeed in pushing the US current account deficit towards 5% of GDP.

            They were always going to get shut down. They are just incredibly bitter because they anticipated another 8 years of looting.

        • 0 avatar
          bd2

          W/ the inevitable reciprocal tariffs, the US will no longer be the export center for German crossovers.

          BMW has already started to diversify sourcing of its crossovers (South Africa, China).

          And that’s on top of higher steel and aluminum prices (btw, the Drumpf built his Vegas and Chicago properties using cheaper Chinese steel and aluminum) which already make American products less competitive in the world-wide market.

          And for some American manufacturers who have to import special steel (as there are no US producers), they pretty much can kiss their export business goodbye.

  • avatar
    John

    Sooo Funny these the Sky Is Falling proclamations from the Auto Industry. But where were they on Argentina’s, Brazil’s, Chinas, India’s and Mexico’s exorbitant Import Tax, VAT and Luxury Tax, in fact Mexico has an excessively high import tax on auto parts, unless the parts are being imported for finishing and assembly into a component or vehicle that is being exported. China, well China’s automotive and parts industry is there becouse of their Import tax, vat and luxury tax.

    • 0 avatar
      Big Al from Oz

      John,
      Wow, are you living in a cabin in the Smokey Mountains or Ozarks.

      Provide links supporting your claims.

      Oh, VAT, luxury tax affects all equally and doesn’t affect imports over locally produced items.

      And VAT is no different than State tax in the US. So with your logic US State taxes are import barriers.

      Hmmmmm?

      • 0 avatar
        "scarey"

        DRINK ! BigalFromOz is so flustered that he left out a word !
        DRINK ! BigalFromOz badmouthing rural dwellers ! (Obvious case of pot calling kettle Black)
        “Prince Harry is the closest thing to an Australian.”
        “In the family ?”
        “No. In the country.”- scene from “The Windsors”

        • 0 avatar
          barksdale

          hmm… a bit better reference, scarey, but I just don’t see the American Nebraska scarey character being into both The Steve Allen Show (Jose Jimenez) and the Windsors. Doesn’t ring true, somehow. Don’t worry – we’ll get there together! (if the mods don’t check your IP address first, that is – fingers crossed!!!)

      • 0 avatar
        John

        Leta see the average sales tax in the USA is 8.45%. China has 3 VAT brackets @ 6, 13 and 17%, Import Tax is 25%, displacement tax for vehicles over 3.0L is 25% to a high of 40% on engines over 4.0L, but the BIG one is the Luxury Tax, that is applied once the VAT, Import tax and Displacements Tax is tacked onto the price of an item, and the Luxury tax rates are 10, 17 and 30%..ohh and there is a final purchase sales tax of 6-10%. And I got these numbers fron Forbes,CNBC and the The Ministry of Finance and the State Administration of Taxation

    • 0 avatar
      Astigmatism

      “But where were they on Argentina’s, Brazil’s, Chinas, India’s and Mexico’s exorbitant Import Tax, VAT and Luxury Tax”

      Do you want to be a consumer – or a worker or a business owner – in Argentina, Brazil, China, India or Mexico?

  • avatar
    65corvair

    Toyota and Mazda, did you condemn Japan for unfair trade practices?

    • 0 avatar
      Big Al from Oz

      Japan has no import tariffs or constraints on US vehicles.

      So what is unfair that the Japanese do? Provide links, this will be interesting.

      • 0 avatar
        Tele Vision

        Here’s great link that The Great Unwashed won’t click n’ read. Give it an eyeball, my Antipodean Amigo, though you likely know all of the forthcoming already. Greets from Canada.

        • 0 avatar
          Tele Vision

          https://dailykanban.com/2015/01/japan-closed-market-world-managed-import-360000-foreign-cars/

        • 0 avatar
          Tele Vision

          I can’t post the link, strangely. I’ll try again.

          https://dailykanban.com/2015/01/japan-closed-market-world-managed-import-360000-foreign-cars/

          • 0 avatar
            TW5

            @ Tele Vision

            That article was written by Bertel. Stop insulting our intelligence.

            Japan is still the most closed market in the OECD, and it’s domestic automakers still control over 90% of the auto industry. Furthermore, US imports from Japan are approximately 1,000 times higher than Japanese imports from the US during this millennium.

            These highly irregular outcomes are not the result of “free trade”. Japan has a litany of regulatory barriers from foreign investment limitations to kei car tax subsidies to currency manipulation. They have it down to a science.

            This isn’t the first time we’ve had a fight with Japan over automobiles. It happened in the mid-90s as well, and we signed some huge memorandum with them, after which foreign automaker market share fell further because Japan simply found new ways to collaborate and keep foreign brands and imported cars out.

            It’s not debatable. Japan is a closed market, and it’s embarrassing that they keep pretending otherwise.

      • 0 avatar
        Steve From Japan

        Big Al, I believe 65corvair wrote, “unfair trade practices”. You have to understand, Japan learned long ago that non-tariff barriers are much more effective in keeping its markets closed than tariffs can ever be. Consider that, according to the American Automotive Policy Council’s report, “How Japan has Maintained The Most Protected and Closed Auto Market In the Industrialized World”, Japan ranks 30th out of 30 of the OECD countries in measuring access for imported autos. It concludes that Japan’s closed market isn’t natural or an accident – it was created deliberately, by government policy, as the following points from this report illustrate:

        “- Following the closure and banishment of US auto firms from Japan during the WWII, US firms were not allowed to return to establish operations in its aftermath.

        – Instead, Japan’s designated the creation of a major world class automotive industry its number one National Industrial Policy strategy and provided every benefit, incentive and protection from competition that it could.

        – In the 1970s, Japan finally opened its market to limited import participation, lowered its prohibitive tariffs and investment restrictions, but did so after it had created a massive and robust industry and controlled nearly 100% of its market.

        – When Japan officially ‘opened’ its market, it perfected the art of using non-tariff barriers as huge obstacles to all foreign companies trying to do business in Japan to keep imports to a minimum.

        – U.S. companies or other foreign ‘transplants’ were not allowed to be built in Japan under Japan’s strict investment laws.

        – Each individual imported car was required to be brought to the Ministry of Transport for two days for inspection before approval for sale.

        – Japan’s exclusive ‘keiretsu ‘arrangements between government and Japanese automakers prevented US and other foreign auto companies from doing business in Japan.

        – Japanese auto distribution system was stacked against importers- existing auto dealers were forbidden to sell foreign autos or to partner with foreign automakers.

        – Japan has used automotive technical regulations as a means to protect local markets by creating excessively difficult and costly regulatory and certification requirements, with little or no safety or emissions benefits.

        – The tax system in Japan was designed to benefit domestic over imported motor vehicle types.

        – Japan has rigged its market to uniquely protect and benefit its own for decades now. When the US government created its “Cash for Clunkers” program last summer, it was very carefully constructed to be open and welcome to all automakers, foreign and domestic. Half of the benefits went to Japanese auto companies. But when Japan opened its own similar program, it deliberately designed it to exclude US and most other imported automakers from participating and benefiting. This is wrong in principle, wrong in the spirit of commitments made to the G7 to not erect new protectionist measures during this economic crisis, and wrong on any basis of fair play.”

        • 0 avatar
          Big Al from Oz

          Australia, Canada, in fact most all nations back half a century plus ago had all kinds of protection.

          The reality is most of those barriers are gone and NOW the US has the most significant barriers that created a market of unexportable product.

          The US also had since the 60s to fix up its industry, but it has dragged the chain.

          The US is NOW the country out of step with the rest of the world with different regulations, controls and 25% tariffs.

          If the US wants exports maybe the Energy crisis would of been a great time for the US to change its ways. It might be to late now as the US is 15% of the market with incompatable stanards and vehicle types that don’t suit global requirements.

          I can go back further than you and claim the US used European IP in the 19th Century to create the country.

          • 0 avatar
            Steve From Japan

            Japan’s very real non-tariff barriers are not ancient history, but are still very much in place.

            It was not long ago that The Truth About Cars did a six part series about how difficult and costly it is to import an American car to Japan due to a bevy of technical requirements and regulations whose sole purpose seems to be to keep the Japanese market closed to imported cars. In this case, TTAC’s own Thomas Kreutzer imported his 2013 Chrysler Town and Country minivan to Japan when he moved to the country from the U.S. in 2015. It took him many weeks and approximately 5,000 U.S. Dollars simply to get his American car registered in Japan. He documented his ordeal in the following posts on the website The Truth About Cars:

            1) Swimming Upstream: Importing a Car Into Japan (October 5, 2015)
            2) Swimming Upstream: Step 1 – Japanese Emissions and Noise Testing (October 7, 2015)
            3) Swimming Upstream: Steps, 2, 3, 4 & 5 – Pre-Shaken (October 16, 2015)
            4) Swimming Upstream: 30 Day Countdown (October 23, 2015)
            5) Swimming Upstream: The Final Hurdle (November 6, 2015)
            6) Swimming Upstream: VJ Day (November 13, 2015)

            In his last post, he writes the following:
            “At around two o’clock in the afternoon, I finally got the plates bolted on and headed off to the city hall to return my temporary tags. With that last errand completed, the job was done and the van fully legal.
            What were the costs? It’s hard to calculate as I didn’t keep all my receipts, but I have a general idea of the major things so I’ll try to get somewhere in the ballpark.

            Including temporary plates, which I renewed 11 times, JATA emissions and noise testing, the new right-hand-drive optic headlights, the pre-inspection and associated work to “fix” the signals, the plate adapters, the parking permit, the recycle fee, and the litany of different fees I paid today, I estimate a grand total of $4,260. Of course, there were other costs I didn’t track: the tolls for my useless trip to the closed Chrysler dealer, parking fees I paid while I ran hither, thither and yon and any number of other silly fees that probably add another two or three hundred dollars in real money. And I don’t even want to think about my lost productivity, the vacation days I had to take to push everything through, and the mental stress of it all…”

  • avatar
    Robbie

    GM has just joined in:

    https://www.bloomberg.com/news/articles/2018-06-29/gm-warns-trump-tariffs-could-lead-the-carmaker-to-shrink-in-u-s

    Of course, no auto maker will be happy that car manufacturing is facing a new tax now, because this will make cars relatively expensive compared to other goods.

  • avatar
    Big Al from Oz

    Well, I told you so.

  • avatar
    Sub-600

    BAFO’s in Calcutta today. He’s looking at a cherry Tata Nano he found in the AutoTrader.

    • 0 avatar
      Big Al from Oz

      Your inference that India is a lesser country really displays your ignorance.

      Indian auto manufacturers are producing product to suit the market.

      Your comment is akin to stating KFC is a worse business because it doesn’t use as much beef as Burger King.

      India do build some good vehicles by the way.

  • avatar
    Steve From Japan

    I think Toyota may have just shot itself in the foot by stating that tariffs would increase the price of a Camry by 1,800 dollars. This lends further credence to the argument that Toyota’s plants in the U.S. are simply low-value-added assembly plants and not manufacturing plants, since most of the important high-value-added components are imported to the U.S. from Toyota’s factories in Japan.

    A big criticism of Japanese automakers in America has always been that most of the Japanese cars sold there as “American made” have in fact very little in way of American content. This is detrimental to the U.S. economy and bad for American workers. According to The Japan Times (Trade heat from Trump makes Toyota’s test in U.S. even tougher, Feb 7, 2017):

    “Toyota still imports (to America) a significant proportion of high-value components like engines and transmissions, said Takaki Nakanishi, the top-ranked auto analyst for six consecutive years through 2009 in rankings by Nikkei Veritas…“Japan’s auto industry has not sufficiently localized operations in the U.S., its largest sales destination market,” Nakanishi, a Tokyo-based analyst for Jefferies Group LLC, wrote in a Jan. 30 report.”

    In admitting that the price of its “American made” cars will go up significantly if tariffs are imposed, Toyota has in fact bolstered the case for tariffs, since imposition of tariffs will encourage foreign automakers like Toyota to manufacture more of their components in the U.S. This will help American manufacturing and create more high-paying jobs in the U.S.

    • 0 avatar
      Garrett

      The other possible alternative is that they are going to use accounting to shift which models have to support overhead costs.

      It doesn’t really matter to me, because I’ve never considered owning a Camry. I doubt I will ever own a Toyota either. Nothing appealing there.

    • 0 avatar
      TW5

      Agreed. It’s a double blunder considering many Americans are down on their own auto industry for being bailed out, moving production to Mexico, and importing cars from China, Korea, and the EU.

      The Japanese manufacturers, particularly Toyota and Honda have worked tirelessly to promote themselves as American companies, but Toyota just blew its cover. If people dig deeper they will discover the breadth of foreign content in Toyotas and a number of models within the Toyota and Lexus lineup that are still assembled exclusively in Japan.

      Not smart.

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