Mexico tariffs could cost GM $6.3 billion, Ford $3.3 billion

[struggle4progress]

Eric D. Lawrence, Detroit Free Press Published
0:37 a.m. ET May 31, 2019 | Updated 2:10 p.m. ET May 31, 2019

Detroit automakers face billions in lost profits from tariffs on imports from Mexico announced Thursday by President Donald Trump, an assessment said Friday morning.

The Deutsche Bank industry update and analysts said General Motors is the most vulnerable, followed by Fiat Chrysler Automobiles and Ford.

Trump tweeted that he would impose escalating tariffs on Mexico "until such time as illegal migrants coming through Mexico, and into our Country, stop," seeking to pressure Mexico to block migrants fleeing Central America to seek asylum in the United States ...

https://www.freep.com/story/money/cars/2019/05/31/trump-mexico-tariffs-imports-automakers-detroit/1297800001/

[struggle4progress]

1. Stocks slump

UPDATED ON: MAY 31, 2019 / 1:53 PM / CBS/AP

Stocks fell sharply on Friday after U.S. President Donald Trump announced more tariffs on imports from Mexico, magnifying concerns about the economic impact of U.S. trade disputes around the world. Automaker shares are among the hardest hit on fears the tariffs would raise costs for vehicles and parts imported from Mexico.

The Dow Jones Industrial Average declined 240 points, or almost 1%, to 24,929 as of 1:30 p.m. Eastern Time. The S&P 500 and tech-heavy Nasdaq also lost 1%. Ford Motor's stock price fell about 2.5%, with shares trading at less than $10, while General Motors' stock price shed around 4.5% on fears the tariffs would eat into the automakers' profits and raise vehicle prices for consumers ...

https://www.cbsnews.com/news/stock-market-down-today-on-fears-of-impact-from-trumps-mexico-tariffs/

[redstatebluegirl]

2. Up goes the price of those 40 thousand dollar pick up trucks.

[struggle4progress]

3. Investors now counting on the Fed

PUBLISHED 2 HOURS AGO
UPDATED MOMENTS AGO
Patti Domm

Expectations for a Fed bailout for markets and the economy rose sharply after President Donald Trump’s surprise threat to put tariffs on all Mexican goods if Mexico doesn’t do more to stop immigrants from entering the U.S.

Many investors believe in the “Trump put,” — the idea that he would act to limit the stock market’s downside because he views the market’s performance as a reflection of his own success. But after Trump’s announcement on Twitter on Thursday night, investors may be considering whether the Fed could be the real backstop.

That was evidenced in the sharp jump in market expectations Friday for a Fed rate cut. Fed funds futures were pricing a 64% chance of either a half percent rate cut or two quarter-point cuts by the end of the year.

J.P. Morgan Chase economists also promptly called for two Fed interest rate cuts by December, changing their view from an equal chance for either an interest rate hike or cut ...

https://www.cnbc.com/2019/05/31/investors-who-were-hoping-trump-would-rescue-the-stock-market-are-now-counting-on-the-fed.html

[at140]

4. People won't stop driving cars..

Those cars could be made here instead of importing from Mexico.
That will mean more union jobs for American workers.

[roamer65]

10. Actually, no.

They will close plants and cut US-based production instead. GM and Ford will slash the hell out of its higher paid American workforce.
More vehicles will come from South Korea, since we have a free trade agreement with them and they have idle capacity.

[at140]

11. Hard to forecast if...

Buyers will be willing to shell out 25% for cars -or- stop driving altogether.
Some will begin using public transportation, but most Americans love their cars.
Last week I was in Seattle. The car traffic is horrendous in spite of high gasoline tax there.

If Americans keep buying cars at higher prices, Ford & GM will exploit that demand.
Those outfits will never let a profit making opportunity go by. With robotics, number of
man hours of labor required to manufacture a car has gone down steadily.

[forthemiddle]

16. Yet, just yesterday GM announced

A 24 million dollar investment in the Fort Wayne, Indiana plant because the can’t keep up with demand for the production of pick ups.
https://www.wane.com/news/local-news/gm-chairman-ceo-to-make-major-announcement-at-fort-wayne-plant/2038916423

[Iliyah]

12. In short, the USA's economy will suffer.

Many corporations HATE unions. It will take numerous years before Unions can make such a come back. In the meantime, low wages with no benefits. With tariffs (Mexico/China) in placed, many of the resources needed to build will cost and may be hard to obtain. Meanwhile, corporations will find another country (ies) to build . . .

It's gonna to be rougher for the middle class and poor.

[at140]

18. All American car makers are union shops!

Correct me if I am wrong.

[highmindedhavi]

13. As a Teamster myself, I hope so

[Wellstone ruled]

14. So what we are to expect is

Poniz Don snaps his fingers and suddenly magically all these Cars are made State side. It does not happen that way. Component Sub Assemblies plants have to be built and Material Supply Lines established as well as support systems. Best guess would be at least two years from start time before any of this would be up and running and in the Mean Time,we will have tens of thousands of workers(Union Workers)sitting on the Bench knowing that their Unemployment will only last 26 weeks. .

First thing that has to change is the Corporate Tax Code. When it is more profitable to off shore your work,well,these jobs are not coming home. We have seen this crap before,so the volume shrinks but the Price increases to keep the cash flow at a reasonable level. Bonus's have to be paid.

[struggle4progress]

5. Automaker Stocks Drop

May 30, 2019 8:17 PM ET
RICHARD GONZALES
LAUREL WAMSLEY
Updated at Friday at 12:25 p.m. ET

President Trump says he will begin imposing tariffs on all goods imported from Mexico beginning June 10, unless that country does more to help reduce illegal immigration from Central America.

Shares of automaker stocks fell Friday morning following the news. It also drew a response from carmakers — many of whom have built facilities in Mexico in recent years to take advantage of cheaper labor and easy access to the U.S.

The American Automotive Policy Council, which represents U.S. automakers, criticized the threat to impose tariffs on Mexico, in a statement released Friday.

"We are strong supporters of the administration's United States Mexico Canada Agreement because it makes significant improvements to the NAFTA, but it relies on duty free access to be successful," the council said. "The imposition of tariffs against Mexico will undermine its positive impact and would impose significant cost on the U.S. auto industry" ...

https://www.npr.org/2019/05/30/728484981/trump-announces-new-tariffs-on-mexico-to-force-cooperation-on-illegal-immigratio

[RedParrot]

6. My tequila will go up by 5% now, 25% in October

Mess with my tequila means war!

[struggle4progress]

7. GOP lawmakers, business groups slam tariff threat

May 31, 2019, 11:08 AM EDT / Updated May 31, 2019, 2:05 PM EDT
By Rebecca Shabad, Geoff Bennett and Kristen Welker

WASHINGTON — Several Republicans in Congress and major business groups on Friday slammed President Donald Trump’s threat to impose a 5 percent tariff on all Mexican goods starting next month, warning that the move would hurt both the U.S. economy and the chances of Congress approving a major trade deal with Mexico and Canada.

The president said Thursday that the tariffs would rise monthly to as high as 25 percent unless Mexico “substantially stops” the number of migrants entering the U.S. illegally.

A senior administration official and two sources familiar said business groups and federal agencies were not informed of the president’s tariff threat ahead of time. A fourth source familiar said the relevant congressional committees were not notified.

The U.S. Chamber of Commerce confirmed in a press conference call Friday that it is exploring all legal options, including filing a lawsuit against the White House. Sources at other business groups say they are exploring litigation and legislative options, as well ...

https://www.nbcnews.com/politics/congress/gop-lawmakers-business-groups-slam-trump-s-mexico-tariff-threat-n1012441

[struggle4progress]

8. Tech industry worried

By Makena Kelly
May 31, 2019, 12:53pm EDT

... In statements on Friday, top tech industry, lobbying, and advocacy groups argued that these new tariffs were inappropriate and could lead to Mexico imposing its own tariffs on the US in retaliation, with serious consequences for the industry if the situation escalates.

“This is potentially devastating to American small businesses and all the people they employ,” Gary Shapiro, president and CEO of the Consumer Technology Association (CTA), said in a statement. “This is a short-sighted, short-tempered reaction that doesn’t recognize a basic economic fact – tariffs are taxes.” The CTA sponsors consumer tech events, including its annual Consumer Electronics Show (CES) ...

https://www.theverge.com/2019/5/31/18647410/trump-mexico-tariffs-usmca-trade-us-tech-industry

[struggle4progress]

9. Volpe: 'Some men just like to watch the world burn'

Nicole Gibillini, BNN Bloomberg

The head of the Automotive Parts Manufacturers Association says U.S. President Donald Trump’s latest tariff threat will serve as another hurdle in getting the new North American Free Trade Agreement ratified.

“Some men just like to watch the world burn. And there is no rhyme or reason to this. We’ve entered ratification season for NAFTA 2.0 in all three countries,” Flavio Volpe told BNN Bloomberg in an interview Friday.

“Trade is <in> the purview of Congress, and I see this as being another wrinkle in [Trump’s] ability to be able to ratify.”

Volpe’s comments came after Trump threatened to impose five-per-cent tariffs on imports from Mexico ...

https://www.bnnbloomberg.ca/some-men-just-like-to-watch-the-world-burn-volpe-on-trump-s-tariff-threat-1.1266985

[still_one]

15. and Americans with increased prices of fruits and vegetables

[hunter]

17. Trump doesn't care about fruits and vegetables.

The price of fries and ketchup doesn't matter to him.

[at140]

19. Trump is not affected by fruits & veggies

Watch out if McDonald's burgers are going up.