Tariffs- how do they affect Broncos? Not political please

[JBlanco]

An old B6G tradition from the 2020 Reservation days says that you now owe us either a shot of whiskey or a bong hit depending on your state’s version of Freedom.

If cannabis is illegal in his State, the bong hit would represent true freedom!

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[JBlanco]

ok, so Tesla looks better because it's significantly smaller than all the others & only makes what, 3 models?

5, but yes.

 

[Iceman62]

Might be a good time to watch a good-old classic movie = "Trading Places."

FWIW, seeing news updates that auto industry prices will take 3-6 months to impact prices. Not saying dealers won't jump at a chance to increase, but hopefully things will stabilize by then.

 

[JBlanco]

All true, but I wouldn't call it greed, they'd be foolish to do anything else. "Yeah, I think I'll leave $10K on the table 'cause I'm a kinder gentler corporation."

Understood, but the point is that tariffs imposed on imported items won't really lower the prices for the end consumer, they will simply enrichen the domestic corporation. I would say, that's one of the big reasons elon "invested" in the candidacy...

 

[jtgensler]

Understood, but the point is that tariffs imposed on imported items won't really lower the prices for the end consumer, they will simply enrichen the domestic corporation. I would say, that's one of the big reasons elon "invested" in the candidacy...

100%. They say it will create higher wages & new jobs, but experience tells us that isn't happening.

I remember an old joke about "trickle down economics" - they had the same idea in the 1800s - if you added bird seed to your cattle feed, the cattle would "trickle it down" to the birds.
It was bullshit then & it's bullshit now.

The corporations will never willingly give more of their profit to their workers.

 

[PWillette]

Domestic steel & aluminum will do the same & we're already seeing it reflected in the raw material prices. I've already had to start raising my prices on the products we manufacture for an OEM. Which means they'll in turn raise their prices. & the end user will end up paying a higher cost.

Our company is in heavy industrial construction...we started seeing 7% Tariff surcharges from our vendors on stainless steel items (valves, pipe fittings, etc.) and control devices several weeks ago. All of our bid proposals now include a disclaimer that any tariff surcharges levied by our vendors will be passed along to the customer.

 

[Brian_B]

Funny how Mabett is the most popular aftermarket seller in this forum... (nothing wrong with the seller, I have a few of his products, but we all know they are not made in the USA).

Some things, I have no problem paying extra for quality. Like tow hooks, or performance components. Shoot, I just dropped a G on a new battery. I expect it to perform well and last, and ultimately make the cost worth it. Maybe that will pay off, maybe not.

Some other things, I just need "good enough." For example, and using a Mabett item, I don't necessarily need to pay 5x more for a bespoke, high quality demure billet aluminum cup holder. A cheap plastic mass produced one will work just fine.

It's the whole cost vs value thing. They are related but not necessarily the same thing. And while everyone has a different opinion of what "value" may be, cost is a non-disputable fact.

Note - I am specifically not equating "Made in the USA" with quality, although often I will trust something made domestically by a well known name brand

 

[jtgensler]

Our company is in heavy industrial construction...we started seeing 7% Tariff surcharges from our vendors on stainless steel items (valves, pipe fittings, etc.) and control devices several weeks ago. All of our bid proposals now include a disclaimer that any tariff surcharges levied by our vendors will be passed along to the customer.

I've had that kind of disclaimer on our quotes since 2018.

 

[BroncoT]

All true, but I wouldn't call it greed, they'd be foolish to do anything else. "Yeah, I think I'll leave $10K on the table 'cause I'm a kinder gentler corporation."

Exactly. Just like stock buybacks after the Trump corporate tax cut. Corporations will thank Trump for his input then behave in their best interests. Capitalism 101.

 

[SeptuagenerianSasquatch]

I hope this taken as analysis, and not political.

According to an article I came across, the administration's agenda is five-fold. Some of these will affect us very quickly, others later.

1) Energy independence
2) Lowering taxes
3) Reduce the Federal deficit by addressing waste and fraud
4) Address our negative balance of payments in foreign trade (thus, tariffs)
5) Increasing our manufacturing base (thus, tariffs)

As I see it, energy prices are coming down, and should have a fairly immediate salutary effect.
Lowering taxes and reducing the Federal deficit are intermediate objectives, and we might see progress on those in maybe a year.
But: addressing our balance of payments and increasing out manufacturing base are like the proverbial turning-the-aircraft carrier, and we'll see--over the next few years--whether anything gets done on that. But right now--the tariff policy is very confusing and unsettling.

 

[jtgensler]

I hope this taken as analysis, and not political.

According to an article I came across, the administration's agenda is five-fold. Some of these will affect us very quickly, others later.

1) Energy independence
2) Lowering taxes
3) Reduce the Federal deficit by addressing waste and fraud
4) Address our negative balance of payments in foreign trade (thus, tariffs)
5) Increasing our manufacturing base (thus, tariffs)

As I see it, energy prices are coming down, and should have a fairly immediate salutary effect.
Lowering taxes and reducing the Federal deficit are intermediate objectives, and we might see progress on those in maybe a year.
But: addressing our balance of payments and increasing out manufacturing base are like the proverbial turning-the-aircraft carrier, and we'll see--over the next few years--whether anything gets done on that. But right now--the tariff policy is very confusing and unsettling.

The problem with any of that, is some of those are 5-10 year things.
Increasing our manufacturing base is great - if you started today, most of the plants you'd want to build wouldn't be ready until the 2029 Inauguration & who knows who that will be or what policy they'll implement.
Are you gonna invest 10s or 100s of millions in a factory & then watch the policy potentially flip in 4 years?
Since DJT is ruling by executive order, not by law, none of his polices have any permanence.

And no matter what they say, they'll never lower taxes in any meaningful way.
They could make the govt the most effiencient org on the planet, pay for everything with tariffs (which are just a tax) & they'd still want to take their federal income tax, just because they can.

 

[SeptuagenerianSasquatch]

The problem with any of that, is some of those are 5-10 year things.
Increasing our manufacturing base is great - if you started today, most of the plants you'd want to build wouldn't be ready until the 2029 Inauguration & who knows who that will be or what policy they'll implement.
Are you gonna invest 10s or 100s of millions in a factory & then watch the policy potentially flip in 4 years?
Since DJT is ruling by executive order, not by law, none of his polices have any permanence.

And no matter what they say, they'll never lower taxes in any meaningful way.
They could make the govt the most effiencient org on the planet, pay for everything with tariffs (which are just a tax) & they'd still want to take their federal income tax, just because they can.

Valid points. I suggest that you avoid mentioning specific names, as that veers into politics. As it is, this is not just auto parts and assembly but public policy. I hoped my post provides context and alleviates misgivings. Uncertainty? That's another matter.
Yes much is being done by Executive Order, but understand that much was established by Executive Order--some of these agencies were Executive Orders by FDR!--, and much more by government regulators.

 

[the poacher]

Very negatively!

 

[Snacktime]

The Tariffs have slammed the brakes on several large projects locally. I work in mining and aggregate material demands have dropped. No one is making the commitment to projects as costs are unknown. Prior to this everyone was holding off due election year changes.

All the large casting parts come from India and China are now going to drive up manufacturing costs. The question becomes is cheaper to pay the Canadian Tariff for finished product or the 60% Tariff for the Wear Liner you swap every 45 days. Tariffs just shift the cost structure. All Capital Projects just got postponed, this tit for tat trade issue makes cost forecasting and rate of returns unknown.

Same thing for automotive companies, need to figure out if its cost effective or layoffs. Looks like layoffs are the preferred avenue currently as inventory is high.

 

[the poacher]

Here's a short (8min) story on YouTube by WSJ on what parts are foreign made on an F-150.

Not directly a Bronco but this should be a decent corollary.

Hey Draughon,
Thank you for sharing this clip. I hope everyone on this thread took the time to watch it as it does a very good job of breaking down the negative impacts this administrations tariff's decisions will have on most of us.
The impact to the overall economy in the U.S. will be broad and very painful to most Americans. Considering that the present administration ran on lowering prices and taming inflation, and that the tariffs will have the complete opposite effect, this administration will be voted out come the next election due to the pain it will inflict on most of you.
If you are a US based manufacturer, are you will to gamble billions of dollars on moving their manufacturing back to the US, where they will not be able to manufacture as cheaply as they are presently, only to see the next administration cancel all of these tariffs to help right the broken US economy and have their investments go down the drain?
Only time will tell, but I suggest that the answer will be no, from most of the manufacturing base.

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