Tag: tariffs

By on January 16, 2019

british-leyland-mini

With Britain’s parliament rejecting Prime Minister Theresa May’s latest Brexit deal, European automakers stand to face some strong headwinds in the near future. As of now, no clear path lies ahead. Many believe the European Union will continue playing hardball, punishing Britain for leaving. But, even if it doesn’t, loads of regulatory and trade issues must be resolved in short order to avoid problems.

There’s also no shortage of hyperbole surrounding the issue. Just this morning I heard cable news call it “the largest crisis in Britain’s history,” as if World War II never happened. A channel away, another outlet proclaimed how splendid it would be for trade between the United Kingdom and United States.

Regardless of which side of the fence you fall, there’s more at stake here than Theresa May’s job. Automakers, who like consistency above all else, worry a no deal plan for “British independence” could be tantamount to flipping the industry table. They don’t like being caught up in the uncertainty surrounding Brexit, and there appears to be an endless list of issues to contend with.  (Read More…)

By on December 14, 2018

China announced Friday its intent to reduce tariffs on imports of American-made cars as it tries to negotiate a trade deal with the United States. As you’ll recall, the People’s Republic imposed additional punitive tariffs on U.S. cars and auto parts earlier this year after promising it would lower the trade barriers on a global scale.

Things look to be different this time around. China has already taken steps to scale back the trade war and appears ready to continue down that path. Earlier this month, President Donald Trump and Chinese President Xi Jinping agreed to a truce in the trade war at their meeting in Argentina. This was followed by an announcement, via Trump’s Twitter account, claiming China had agreed to scale back auto tariffs against the United States(Read More…)

By on December 3, 2018

Trump

Last night President Donald Trump tweeted that China had agreed to reduce tariffs. While The People’s Republic already lowered tariffs over the summer, it chose to cut the United States out of that deal as trade relations worsened. In fact, America found itself subject to an increased, 40-percent fine on imported autos while the rest of the world saw their tariffs (partially) eased. But the president seems optimistic.

“My meeting in Argentina with President Xi of China was an extraordinary one,” Trump explained in a follow-up post. “Relations with China have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!”

Meanwhile, China remains silent on the matter.  (Read More…)

By on November 14, 2018

The Trump administration was supposed to make an announcement Tuesday as to whether or not imported automobiles pose a national security risk, following discussions with trade representatives. While it wasn’t presumed that the White House would say anything truly definitive or hold a formal press conference on the issue, it was assumed that the president would take a stronger public stance either for or against an earlier proposal to raise foreign auto import tariffs to 25 percent. And it has, in a way.

According to those familiar with the matter, the White House decided to postpone any major decisions after discussing a draft Commerce Department report on the impact of auto imports with trade reps. However, the administration doesn’t have forever to make up its mind. Nor does its trading partners, which could be the point.  (Read More…)

By on November 13, 2018

infiniti nissan factory japan

The U.S. Commerce Department has submitted draft recommendations to the White House on its investigation into whether it’s prudent to impose tariffs of up to 25 percent on imported automobiles and parts, based on the premise that they’re a threat to national security. The possibility has the industry in a tizzy, with both foreign and domestic brands lobbying against it.

Truth be told, we half assumed the entire concept was a ruse to bring other nations to the bargaining table with something to lose — a scenario where the United States could be viewed as a favorable alternative to tariff-crazy China. However, China has begun opening its market to foreign automakers while also placing a massive 40 percent duty on American autos, leaving the U.S. at a disadvantage. Now it looks as if the Trump administration may go through with everything.  (Read More…)

By on October 23, 2018

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Ford Motor Co. is blaming Donald Trump’s commodity tariffs for elevating U.S. steel prices higher than any other market on the planet. Regardless of your opinion on the president’s policies (the economy is reportedly booming), it’s a little hard to rebuff Ford’s criticisms on this one. The automaker’s now going straight to the source in an attempt to remedy the situation.

Trump hasn’t gone easy on Ford. He spent a large portion of his presidential campaign coming down on the automaker over its plan to move small-car production to Mexico. However, the company’s about-face proved a short-lived victory — it ultimately decided to stop selling cars altogether. This was followed by Ford’s cull of the upcoming Focus Active in North America after Trump’s 25 percent levy on Chinese-built vehicle made the introduction impossible (and unprofitable).  (Read More…)

By on October 11, 2018

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Now that China has relaxed its joint-ownership mandates, BMW has announced that it will procure a majority stake in its venture with Brilliance Automotive. The German firm will be the first foreign automaker to have majority control of its business in the region.

Being first will not come cheaply, however. It will cost BMW $4.2 billion to assume control with a majority stake of 75 percent of the business — albeit as part of a larger deal. All the manufacturer has to do is come up with the funds and wait until 2022, when rules limiting foreign ownership for all Chinese auto ventures are officially lifted.  (Read More…)

By on October 1, 2018

2019 Lincoln Nautilus, Image: Ford Motor Company

Canada’s autoworkers feel pretty confident they’ll still have a job next year, as the free trade agreement reached by the U.S. and its northern neighbor Sunday night pretty much keeps the status quo alive in that country’s auto sector.

Just last week, with headway essentially absent from the trade negotiations, President Trump repeated his threat of levying a 25 percent import tax on Canadian vehicles. Such a tariff could easily have seen 160,000 jobs erased from the auto and parts manufacturing industries; perhaps more.

However, just because the industry came out all right in the end doesn’t mean the future is entirely rosy. (Read More…)

By on September 27, 2018

Man, if you live south of the 49th parallel, you missed quite a hubbub yesterday evening. Actually, Americans likely caught a whiff of it, as U.S. President Donald Trump’s lengthy post-UN press conference Wednesday covered a lot of topics, including the one that had Canucks up in arms.

Up here in the Great White North, a country some commenters would prefer to never see mentioned (as this writer apparently mentions it ALL THE TIME), trade remains an understandably hot topic. Canada hasn’t reached a renegotiated free trade agreement with the U.S., unlike Mexico, and there’s a Sunday deadline looming to sign on to the U.S.-Mexico accord. Tick tock. Among other planks, Canada wants to protect its dairy cartel — an entity not universally loved up here, as it greatly increases the price of common food staples on store shelves. However, protecting jobs in that sector means risking jobs in the larger auto sector, a crucial industry whose vehicles Trump has threatened to tax to the tune of perhaps 25 percent. Auto parts could see a 10 percent tariff.

Canada exported $48.8 billion worth of vehicles in 2016.

Toyota, Honda, and the Detroit Three all have assembly plants in Ontario. Last night’s news conference brought nothing but worry to the nearly 200,000 people employed in the vehicle and parts manufacturing sector. What would it mean if Trump pulls the tariff trigger? And is Canada blameless in not yet reaching a deal? (Read More…)

By on September 26, 2018

Ford’s decision to construct the current-generation F-150’s body purely of aluminum paid off in terms of lightweighting, fuel economy, and sales, but rising commodity costs over the past couple of years eroded some of the financial benefit. There’s far greater headaches facing Ford these days, as the industry grapples with tariffs on not just imported aluminum and steel, but vehicles as well.

A second income-sucking tariff hit in July, when the U.S. applied an import duty of 25 percent on a slew of Chinese goods, prompting China to up its own tariffs on American goods, including automobiles. Ford isn’t having it. Having already lost $1 billion in profit, CEO Jim Hackett has a message for President Trump. (Read More…)

By on September 25, 2018

2016 Toyota Prius Four - Image: Toyota

While the trade situation is still very much in flux, Toyota sees itself as standing to gain from the turmoil, just not in the United States. The automaker, along with other Japanese brands, finds itself in an advantageous position in China — a massive market facing its own troubles.

China’s anger at the U.S., and vice versa, could mean big bucks in the short term for Toyota. (Read More…)

By on September 9, 2018

President Donald Trump jumped on Twitter Sunday morning to rattle off a series of musings I couldn’t have cared less about. However, mixed in with the rest of them, was a reference to last month’s news that Ford abandoned its plans to import the Chinese-built Focus Active into the United States.

“‘Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the U.S. because of the prospect of higher U.S. Tariffs,'” Trump said in reference to a CNBC article from August. “This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!”

Whether or not you support the president, he has made a genuine effort to convince automakers to do their manufacturing within the United States. However, his comments on the matter make it seem as if he’s a tad confused on how things actually work. Perhaps we can attribute his statement to an unbridled optimism or a tongue-in-cheek jab at Ford. Otherwise, the only explanation is that he doesn’t have the best understanding of what’s happening with the industry — which would be mildly alarming.  (Read More…)

By on August 31, 2018

U.S. Ford Focus production ended in May, but the automaker planned to import the next-generation Focus Active, a slightly lifted, mildly cladded five-door, in order to have something to sell to entry-level buyers. With the subcompact Fiesta ceasing production early next spring and the Fusion following it a couple of years later, that left very little low-end product for new or returning customers.

Well, scratch a crossoverized Focus off your shopping list. The automaker now says the Focus Active will not arrive on these shores in the latter part of 2019, or any date after that.

After learning this, how many of you are now pricing a three-cylinder, FWD EcoSport? Anyone? Hello? (Read More…)

By on August 31, 2018

Donald Trump, public domain

Earlier this year, President Donald Trump took a renewed interest in European tariffs after deciding he didn’t like what he saw. He argued it was time for the United States to consider a fresh tax on vehicles manufactured in the European Union to level the playing field. “If the EU wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a tax on their cars which freely pour into the U.S.,” he wrote in March.

A few months later, America floated the ridiculous-sounding proposal of abolishing all automotive tariffs between the U.S. and EU. Surprisingly, Europe was highly receptive. German Chancellor Angela Merkel even directly addressed the issue by saying she would support lowering EU tariffs on U.S. car imports. The European Union now seems willing to pursue a zero-tariff solution on automobiles.

However, Trump has since changed his tune. The new rhetoric coming from the White House is that the deal, which was originally pitched by the U.S., is no longer good enough.  (Read More…)

By on August 14, 2018


While still an industrial giant on the global scene, Mitsubishi is a shadow of its former self in the United States. After leaning a bit too hard on its status as a value brand, annual deliveries went from about 346,000 units to just 58,000 between 2002 and 2012. Meaningful progress has been made since then, but the road to redemption has been a hard one.

The looming threat of tariffs isn’t making things any easier for Mitsubishi. The automaker doesn’t have a single production facility in the U.S., meaning it will receive the full force of whatever percentage is tacked onto the import fee. There is hope, however. Bizarrely, the brand’s biggest weakness (U.S. sales) is also its greatest strength when it comes to enduring import tariffs.  (Read More…)

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