By Howie Katz
Auto parts on American cars that are imported mostly from China
Trump's 25% tariff on imported cars and auto parts is designed to get Americans to purchase American-made cars instead of foreign imports and to boost jobs in the auto industry. But it ain't a gonna do that.
That tariff is going to cost Americans more, not just for foreign imports, but for American cars as well. That's because most of the auto parts on American cars are imported, mostly from China.
The tariff on auto parts is not going to impact what there is of the auto parts industry in this country. With the high cost of labor, it is far cheaper to import car parts from China than it is to manufacture them here, the cost of shipping and the 25% tariff notwithstanding.
For example, take the container cranes in our ports. It costs a small fortune to ship these huge cranes to the United States from China.
Yet it costs far less to manufacture these cranes in China and ship them to the United States than it would cost to make them in this country. And the 25% tariff won't change that.
It's the high cost of labor in this country that has led to auto parts being made in China and for some American-brand cars and trucks to be made in Mexico.
With an expected price increase of $6,000 for a Japanese or Korean import, President Trump says that Americans will switch to buying American-made cars. That may be wishful thinking.
Brand-loyalty will probably keep Honda, Toyota, Hyundai and Volkswagen drivers from switching to American brands. They'll just wait longer before buying a new car.
It should also be noted that foreign carmakers have plants in the United States while American carmakers have plants in Mexico and China.
So, all that Trump's 25% tariff on imported cars and auto parts will do, as well as the other tariffs he's imposed, is to raise the prices for what Americans purchase.
3 comments:
I wouldn"t want to be on that ship in a rough sea.
Hmmm. Let me see. Who would I heed financial opinion from? The tariff was put in place to reduce to the National Debt. The U.S. has been sucking hind tit for decades due to foreign nations taking advantage of us. I believe 45-47 knows a thing or two about the economy.
Where did you get that national debt reason? Trump has said he was imposing the tariffs to try and revive domestic manufacturing, close the trade gap, and encourage consumers to buy more American-made products.
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