#TradeWars

The profit-focused appeal of building vehicles in low-cost jurisdictions propelled many automakers to boost manufacturing capacity in America’s southern neighbor — a decision that now haunts them.

After President Donald Trump issued a Thursday statement declaring his administration would levy a 5 percent tariff on all Mexican-made goods starting June 10th, some $17 billion in market value evaporated from top automakers the following day. Ford, General Motors, and Fiat Chrysler all saw their share prices tumble. Should Trump follow through on his promise of an escalating tariff (a threat designed to stem illegal migration into the U.S.), the pain felt by both companies and their customers will be extreme.

Naturally, the industry is pushing back the best it can.

Just when it seemed the trade climate in the North American region was easing, President Donald Trump launched a new salvo late Thursday, promising a 5 percent levy on all Mexican goods crossing the U.S. border if the country doesn’t stem the flow of illegal migrants.

The tariff would land on all Mexican goods on June 10th, ramping up to 10 percent on July 1 before topping out at 25 percent by October. For automakers and those who sell (and buy) the final product, the prospect of a new import levy is the stuff of nightmares.

It will be a day or two too late by the time you read this, but: Happy Independence Day! It’s been a very long time since I felt compelled to cloak my appreciation of this country in the kind of irony frequently employed by my autojourno colleagues on Twitter and elsewhere, and I certainly won’t start now. The United States is far from perfect and I am afraid that some of the changes made here over the past fifty years have been profoundly negative in their effects, but it remains the proverbial city on the hill for many of the world’s citizens. As the song says, I’ve been around the world and I, I, I, I… haven’t seen any other place where middle-class families own property, start businesses, and create wealth like they do here.

While I certainly understand how many of my coastal friends and acquaintances no longer feel that the American Dream exists for them or for anyone else, I also feel compelled to note that we are doing just fine here in the Midwest. Where I live, four-year-old children play unsupervised outside and the police shake your hand in the street. Some time ago I accidentally left a $275,000 Ferrari out in front of my house overnight with the windows down, the keys on the center console, and my wallet next to them. Needless to say, nothing happened. I know that’s par for the course inside Mark Zuckerberg’s gates but my neighborhood consists mostly of stay-at-home moms and mid-five-figure household incomes. Come back to the real America, if you like, but leave your emotional support animals, your addiction to food-as-virtue, and your army of domestic staff behind you. Out here, people raise human children instead of “furbabies,” thoughtlessly consume GMO produce, and clean their own bathrooms. It’s considered character-building.

I know you won’t do it. Nobody is going to change sides. We are too deeply divided now into Blue And Red Tribes. We judge incoming information based on how well it conforms to our existing beliefs. Want an example? How about this: For over six decades, the automakers have been predicting that increased emissions, safety, and fuel-consumption standards would have a negative impact on the bottom line. The media alternately ignored and lampooned them for saying so. Now those same automakers say that Trump’s policies will have a similar impact and the media is treating it the way the Catholic Church once treated an ex cathedra pronouncement.

My response to that? It’s this…