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

[First Sergeant]

A few posts have suggested the tariffs have been postponed to March 1. That appears to be untrue: Although you never know what tomorrow might bring....
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Reuters reported earlier on Friday that the White House would push off tariff implementation on China, Mexico and Canada until March 1 — leaving a window for negotiation that could kill the plan altogether.

• "I saw that report and it is false," White House press secretary Karoline Leavitt said during a press briefing.

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A few posts have suggested Ford and other automobile manufacturers would just eat the tariff leaving prices little affected:

IDK why anyone would engage in such wishful thinking. Has anyone looked at Ford's financial reports or own Ford stock? They are losing money on every battery powered vehicle they make.. Ford HAS TO make $$ on their gas powered vehicles. Some talk about competition.... what is the Ford Maverick's competition? What other small truck is out there - especially a hybrid?

On this forum - at least from my reading - the Ranger is the most common alternative. 55% of the parts for the Ford Ranger are made in Mexico or Canada. So it's price is going up too. But what would Ford care if the tariff caused people to buy a Ranger instead? The Maverick's only real competition is the Hyundai Santa Cruz. Which is 70% American made. But the Santa Cruz is already thousands more. For me - if the Maverick and Santa Cruz had been the same price - I'd have still chosen the Maverick. Looks like a truck and I wanted a hybrid.

So yeah. IMHO living in a dream world if you think Ford can just take 25% haircut on the price of the Maverick..... which is already one of the least expensive vehicles. The tariff is gonna be passed on.

Assuming.... as I said in my first post....the tariffs are still in place say a month from now. I'm still skeptical of that.

I bought Maverick for exact same reasons. Low price, Santa Cruz ugly and NOT hybrid, and of course I wanted a hybrid. I wish I knew Ford was coming out with AWD. I drive a lot in snow/ice up and down the state here in Idaho and it is helpful, although I have driven my front wheel drive Maverick through it all and no problems so far. Just have to get a "run" at some of those steeper hills! Maybe give the new AWD Hybrid a year or two in case there are any issues to work out, then maybe get one!

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[BuddyS]

The crazy thing is that the tariffs are just throwing a grenade into the free market. Let's say Fords go up 25% in price. Do you think every un-tariffed car maker is just going to leave prices alone? No -- they'll know that they can raise prices 15-20% and still be a better deal than the Fords, so prices will be up everywhere. And if Ford managed to move all that production to the US where the labor costs are far higher (AND somehow source all the components domestically, too) the price may very well be more than the 25% tariff. So Either way the prices of cars is going to go up notably and STAY up. Forever.

Now imagine that situation on everything.... lumber, oil, all the stuff we bring in from China, etc. Costs for everything are going to go up, up, up. Enjoy it.

(Edited 2x to fix a few typos)

 

[AL-Tess]

If I had not been on this forum, ….
my 30+ years of wanting to purchase my OWN pick up, not a hand me down* Would of been priced out of my reach.
I obtained my dream…just in time.

I did not know that the Maverick was assembled in Mexico And hence will be under the new tariffs .

I am not a finance “WIZ” but one of my adopted kiddos did the “math” for me and we figured I would have to pony up another $9,000 to obtain my ”Dream”.
Dropping another $9,000 maybe nothing to some of you guys but to me that would have been the end of a dream.

* Don’t get me wrong guys … there is NOTHING wrong with passed down beauties!
In fact I need to go to AZ and bring my inherited work in progress up to Nor Cal This spring. Just wanted a pick up that was built the way I wanted.

 

[SLINGSHOT]

I just took delivery of my 2025 Eruption Green Maverick Lariat AWD Hybrid a week ago and still have less than 250 miles on it as much as I love it and being I’ve added a few upgrades I’d be willing to let it go for $75,000

I have a 2023 Lariat Hybrid Area 51 with less than 12,000 miles on it. First $70,000 can drive it home. You also get the tonneau cover, Sam's Club floor mats and steering wheel cover. I'll even throw in the bed mat and tailgate cover. WHAT A DEAL.

 

[Dave O]

I have a 2023 Lariat Hybrid Area 51 with less than 12,000 miles on it. First $70,000 can drive it home. You also get the tonneau cover, Sam's Club floor mats and steering wheel cover. I'll even throw in the bed mat and tailgate cover. WHAT A DEAL.

LOLZ Amen Brother

 

[MakinDoForNow]

I have a 2023 Lariat Hybrid Area 51 with less than 12,000 miles on it. First $70,000 can drive it home. You also get the tonneau cover, Sam's Club floor mats and steering wheel cover. I'll even throw in the bed mat and tailgate cover. WHAT A DEAL.

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?

 

[Prickly Pear]

The crazy thing is that the tariffs are just throwing a grenade into the free market. Let's say Fords go up 25% in price. Do you think every un-tariffed car maker is just going to leave prices alone? No -- they'll know that they can raise prices 15-20% and still be a better deal than the Fords, so prices will be up everywhere. And if Ford managed to move all that production to the US where the labor costs are far higher (AND somehow source all the comments domestically, too) the price may very well be more than the 25% tariff. So Either way the prices of cars is going to go up notably and STAY up. Forever.

Now imagine that situation on everything.... lumber, oil, all the stuff we bring in from China, etc. Costs for everything are going to go up, up, up. Enjoy it.

(Edited to fix a few typos)

You got it Buddy! Several companies were caught bragging to their shareholders that they jacked up prices during Covid to match the ones that needed to go up. A rising tide raises all boats and a tariff is likely to so the same.

 

[64Jazz]

Simply walk into HR on Monday and ask for a 25% raise.
Easy fix.

 

[RR - All the way]

All true but our trade deficit with Canada has doubled in the past 4 years to 45 billion dollars. Thats not Canadas fault that’s our fault.

Recommend you check out the post by "semicolin" on page 13 of this thread.

 

[Joe Strummer]

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.

 

[Glen Baker LLC]

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.

Joe,
Thank you for the explanation.

 

[Milton Jeff]

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.

Your overall explanation is excellent Joe, but just to clarify a bit for others who may not completely understand your point above and using your example.

If say the customs declaration on a shipment of softwood lumber from Canada was 100K the importer would pay 25K to the US collections dept (or whatever they are called). Now say if the cost of producing that softwood lumber including shipping was say 60K (40K CDN profit), then perhaps the shipper can afford to pay part of the 25K tariff. However if the profit is only 10K then it wouldn't make sense to absorb the tariff. Supply and demand. In reality the extra import duties (or at least a portion of them) will be paid by the end purchaser, and likely uplifted some % along the way. In other words, the person buying the home the lumber is used for.

 

[Seand1109]

Just read the tariff actually goes into effect Monday...

 

[AlpineKid74]

I saw on here a lot of posts about the upcoming tariffs, and I just wanted to mention that while all the posts I read exclusively mentioned the Mavericks Mexican involvement, I also wanted to tell everyone that Canada is definitely involved as well.

I work at Arconic in Davenport, IA. We make the aluminum alloys for all the Ford bodies and frames. I can tell you, without hesitation, that 90+% of all our raw or "prime" aluminum originates in Canada. I have unloaded thousands of tons from railcars myself. No raw aluminum=no aluminum alloys. We do a fair bit of recycling/reusing but at best thats 76%, and thats not perpetually sustainable. We need millions of tons a month of prime aluminum.

So, with the vehicle being assembled in Mexico, with aluminum sourced from Canada, it could be, functionally, a 50% tariff.

Not trying to be political. I am stating provable facts. Not solutions.

Has anyone looked at this tariffs thing this way??

If Mexico and Canada was to do what Trump is asking, that the tariffs would go away.

If they do not, Mexico and Canada could cause another 1929.

GUESS what, Mexico and Canada did something. Lets see what happens in 30 days.

 

[zen_]

One thing possibly worth speculating on if this settles in as permanent or escalates further. If it's not economically feasible for Ford to assemble the Maverick in a US plant with 75% American parts to avoid tariffs, are we going to to be stuck with a vehicle that Ford doesn't care about? It could be difficult to impossible to get parts in that scenario since Ford will only make the bare minimum, and it's not worth it for aftermarket part makers. This is already the reality for many Stellantis vehicles, and some parts on the Maverick are already difficult to get.

I'll say again many of Trump's stated goals are not unreasonable, but this we do it right now with shock therapy, no one really knows what the plan is, not even the administration, while businesses and consumers get to deal with the uncertain consequences is madness.

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