Issues with Tariffs, both Mexico AND Canada [ADMIN WARNING: NO POLITICS; MEMBERS ALREADY BANNED FOR IT]

[sundog]

If Ford ships truck parts from the US to Mexico valued at $12,000 (on the US - Mexico Customs Declaration) and Mexico assembles the parts at a cost of $8,000, the tariff applies to the $8,000 and not the declared value of $20,000 ($12,000 + $8,000) from Mexico - US. Otherwise the tariff is being applied to parts ($12,000) manufactured in the US. Even if Ford sells the vehicle for $30,000 in the US, the tariff would be $2,000 (= 25% of $8,000). The $12,000 and $20,000 are referred to as Transfer Charges. They are immaterial to Ford's profit and are often set so as to minimise Ford's global tax liabilities. The tariff is an ad valorem tax not a sales tax.

If on the other hand a good contains no US parts (Canadian softwood for example), the tariff applies to the value on the Customs Declaration from Canada - US.

So, car prices won't increase by the tariff times the MSRP but something significantly less. Goods made 100% overseas will, however, see there cost/price by 25%, depending on how much the importer is willing to absorb.

Not up on the intricacies of this round of tariffs, but won't that $12k in inbound parts in this example from the US incur a retaliatory tariff from Mexico?

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[Joe Strummer]

Not up on the intricacies of this round of tariffs, but won't that $12k in inbound parts in this example from the US incur a retaliatory tariff from Mexico?

I don't know. Sort of weird to impose a tariff on imported parts only for those parts to be subsequently exported. A tariff is designed to protect domestic industry from foreign competition including dumping (which China does with steel).

 

[23grayXLT84]

I'm not convinced this is true. Take as a counterfactual example the following scenario (made simple to illustrate the point). A Ford Maverick is 99.99% manufactured in the US (including parts and assembly) at a cost of $25,000 and shipped to Mexico. In Mexico the windshield wipers (.01%) are attached (at a cost of $10) and the truck is shipped back. Do you think the tariff applies to $25,010 or just $10?

If it is the former, the US car industry in the US in short run is dead. But if you are dead in the short run you are also by definition dead in the long run.

If it is the latter, then the car industry can survive in the short run and restructure in the long run.

We'll find out tomorrow when stock markets open (you bet Wall Street has been pouring over this all weekend).

Regardless , inflation which was back to basically acceptable levels will be high again.

Controversy alert. Not saying it was acceptable before but certain events resulted in inflation raging pretty much all over the world.

Now inflation will rage (or might ?) due to someone's ego.

 

[SLINGSHOT]

Hmmm! Does it fly with the tires 1/4" above the road surface, never needing fuel while having matter reflecting protective no recoil collision shield?

Only if you put 100% nitrogen in the tires.

 

[mktmgrjrm]

I'm really hoping I don't have to go to 'Plan B' on my Lariat Hybrid AWD that's scheduled for production next week some time. Plan B is I keep my 2023 Lariat Hybrid FWD that has less than 6K miles on it. Absolutely no way I'm paying more than the price my dealer and I agreed on. As an added benefit, I won't have to take off all the mods I made to the '23 to put them on the '25.

 

[Glen Baker LLC]

Only if you put 100% nitrogen in the tires.

Nitrogen is so old fashioned. Personally, I use heliummakes the truck lighter for better mpg.
And you float over bumps.

GB

 

[jonshep]

There are only 3 functioning bauxite mine in the US. 90% of the raw bauxite is imported. So get ready for the cost of raw aluminum to go up, and any product made with it.

Oh no!! Beer is going up due to tariffs??? Can they put beer in a cardboard carton like milk?? LOL

 

[MakinDoForNow]

Nitrogen is so old fashioned. Personally, I use heliummakes the truck lighter for better mpg.
And you float over bumps.

GB

Yes hydrogen would be advantageous but I was envisioning a Persian Rug Airborne Propulsion that was revealed to them by a middle aged survivor of the last ice age who is currently domiciled at area 51 retirement village.

 

[Chase300]

Canada/Mexico need us...not the other way around.

The tariffs not only affect the cost of the truck we want..
But look closely at who picks our crops. Migrants. I live in a state that is a large apple and cherry producers. Years ago in high school we went to pick cherries thought we’d make some easy money, we lasted 3 days.
So it’s not just the price of a new truck to think about, it’s the cost of living increasing, gas prices inflation . DJT said he would be the one to lower our cost of living.
Tariffs are pasted on to us, the consumers.
This will probably get me banned from MTC.

What does Tariffs have to do with Migrants?
What do Migrants have to do with the price of gas?
I don't believe anyone said to ban Migrants...which typically are legal workers and not the same as illegal immigrants.
Plenty of other American built pickups to choose from should and I repeat should the Maverick increase in price above the competition.
Heck, China makes great vehicles.. for far less $$ than the Maverick. Maybe we should just let all of them sell here without tariffs???

 

[jonshep]

One of you tariff geniuses explain this. Vehicles are made from parts from different plants, some in other countries. So, if engines and transmissions are made here and shipped to assembly plants in Mexico, does the tariff apply to the total value of the vehicle (wholesale or retail) or just the part made in Mexico? Mexico will retaliate with tariffs. Will that drive up the cost of motors and transmissions resulting in a double tax (tariff) when it comes back across the border? Feel free to substitute Canada for Mexico. Has anyone seen a printer copy of exacty how the tariffs will be applied. I hear, not confirmed, that Canadian crude oil is less than 25%.

 

[semicolin]

Canada doesn't really sell crude as crude. The oil products that we export to america are from the tar sands and contain the "heavy" parts of the product. American fracking produces the "light" parts of the product. The two are combined to make a balanced product that can be fully used by the american petrochemical industry.

Basically, the US needs the Canadian petro product to combine theirs with in order to make it worth more money.

Imposing tariffs on Canadian petro products will not only drive up the cost for americans, it will make american products worth less if you import less of what you need from Canada.

This whole thing is remarkably stupid and anyone supporting it is either ignorant or shorting the market. It's stupid and shameful all around.

 

[Scout]

Canada/Mexico need us...not the other way around.


What does Tariffs have to do with Migrants?
What do Migrants have to do with the price of gas?
I don't believe anyone said to ban Migrants...which typically are legal workers and not the same as illegal immigrants.
Plenty of other American built pickups to choose from should and I repeat should the Maverick increase in price above the competition.
Heck, China makes great vehicles.. for far less $$ than the Maverick. Maybe we should just let all of them sell here without tariffs???

It has a lot to,do with migrants. Most people can’t discerned between legal and illegal. So it all gets lumped together. It’s a scare tactic.

 

[Robot-Wrangler]

I just want eggs to drop. I eat 3 a day lol. I worry about rest after

When Covid-19 struck the US, I started a small garden and bought chickens. I still keep a dozen or so. I give eggs to my coworkers with families and my boss. You should do the same as chickens are inexpensive to raise and will eat anything.

 

[FreedomPenguin]

It has a lot to,do with migrants. Most people can’t discerned between legal and illegal. So it all gets lumped together. It’s a scare tactic.

I grew up in key largo fl, you can’t tell them apart. For every legal, there’s illegal family and friends over. It’s all a crap show.

 

[FreedomPenguin]

When Covid-19 struck the US, I started a small garden and bought chickens. I still keep a dozen or so. I give eggs to my coworkers with families and my boss. You should do the same as chickens are inexpensive to raise and will eat anything.

I live in city, don’t think I’m allowed, or I’d totally have chickens. Wish I had country land

I like animals, I just want a family of all animals. I’d have me a mini farm: lol petting farm

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