Automotive suppliers in the United States make up about 4.8 million jobs and, according to those suppliers, this constant back-and-forth over tariffs isn’t helping an “already-fragile” industry. The good news for suppliers is that those tariffs are on hold, maybe. I don’t know.
The Morning Dump is yet again dipping into supply problems. When we started writing these news roundups a couple of years ago, the industry was facing shortages of workers and, worse, a shortage of the materials necessary to make a car. The root cause was the global pandemic. What’s the root cause now? A global trade war that may or may not be happening. It’s not all bad news on the trade front. Tesla needs good news right now and it seems like President Trump is about to make cars cheaper… in India.
Toyota’s cars are extremely popular and the company can’t make cars like the RAV4 fast enough, but a recent explosion and the tragic death of an employee of a supplier that provides springs for the Rav4 is shutting down production across Japan.
Fear Is The Mind Killer, Uncertainty Is The Job Killer
One of the best reports I’ve read yet about all of the will they/won’t they on tariffs comes from Jackie Charniga at the Detroit Free Press, and I suggest you read the whole thing because it would be inefficient and unethical for me to just copy and paste all of it. The lede is stellar, but let’s get to the root of it:
“The number of communications going out to automakers from suppliers is undoubtedly in the thousands,” he said.
Commerce Secretary Howard Lutnick said Thursday that auto suppliers adhering to USMCA trade agreements could get a month’s respite from tariffs alongside their automaker counterparts — until Trump makes broader tariff decisions April 2.
Depending on their relationships, those communications from suppliers could either be pleadings for tariff relief or aggressive negotiation tactics to ensure automakers keep contract terms, Hearsch added.
“There are a lot of suppliers already at the edge of real financial distress,” he said. “They might ask automakers to pay ahead for parts orders; they can’t wait months for their partners to figure out how to deal with this.”
According to MEMA, which is the country’s vehicle suppliers association, the timing of this is pretty awful:
“The community of vehicle suppliers remains fragile from years of industry volatility, workforce shortages, supply chain disruption and the pandemic. Tariffs of this scale place a significant burden on U.S. manufacturers, increasing costs, reducing profitability, impacting American jobs and the industry’s ability to compete globally,” said Bill Long, President and CEO of MEMA, The Vehicle Suppliers Association.
Vehicle suppliers operate in all 50 states and are essential to the US economy, representing the largest sector of manufacturing jobs in the U.S. The tariffs have raised profound concerns across the sector placing additional pressure on the already-fragile supplier industry and its ability to operate absorb the costs, businesses, grow and invest.
A survey by MEMA showed that a six-month long trade war would cause 47% of companies to cut U.S. jobs and about a third to shift production outside the United States. This is a big issue for automakers, as supply chains take years to build and losing even one key part can shut down production for days, weeks, or even longer.
Tariffs Could Go Higher According To President Trump, Powell On Deck To Address Stagflation Concerns
First, the tariffs happened. And then they sort of un-happened. There’s a month-long pause in effect for most goods being shipped between Canada and the United States. Whether or not they’re coming back is roughly as vague as what Americans did or did not get out of all this hassle.
From Bloomberg, here’s what President Trump had to say about it:
President Donald Trump said tariffs on Mexico and Canada could go higher than a 25 percent rate imposed earlier this week, injecting further uncertainty into trade policies that have rattled markets and left businesses on edge.
Trump’s comments came in an interview that aired March 7, a day after he paused those tariffs until April 2 for Mexican and Canadian goods covered by the USMCA trade agreement he struck in his first term — a move that offered a brief reprieve for two major U.S. trading partners.
Asked in an interview with Fox Business host Maria Bartiromo if businesses would receive more clarity on his trade strategy, Trump responded “I think so, but, you know, the tariffs could go up as time goes by, and they may go up and, you know, I don’t know if it’s predictability.”
Trump imposed the duties on Canada and Mexico earlier this week — along with doubling a levy on China to 20 percent — moves he said he was taking to pressure those countries to do more to stop the flow of illicit drugs and undocumented migrants across U.S. borders.
If you’re thinking this might upset the market, it’ll be hard to discern the reaction between a bad jobs report and whatever Fed President Jerome Powell will say today.
India Might Get Cheaper Teslas
Tesla has had a bit of a rough quarter in some markets, though an end to subsidies sent sales spiking in Canada for a couple of days. The company is looking for new places to sell cars, and it sounds like CEO Elon Musk’s friend President Trump is willing to help him get India to reduce the country’s frankly ridiculous tariffs on imported cars.
Taxes on cars imported into India are as high as 110%, which Tesla chief Elon Musk has criticized as being among the steepest in the world. The EV giant last year shelved its plans to enter the world’s third-largest car market for a second time. It recently signed a lease deal to open its first showroom in Mumbai, registration papers show.
Musk has now found support from President Donald Trump, who has repeatedly railed against India’s high taxes and in an address to Congress on Tuesday slammed the country’s auto tariffs of more than 100%, threatening reciprocal action.
“The U.S. ask is for India to bring tariffs down to zero or negligible in most sectors, except agriculture,” the first source said, adding the expectation on New Delhi eliminating auto tariffs was “clearer than any other.”
See, someone is getting cheaper cars! It’s not us, but this should help absorb some potential capacity from Tesla’s plants, which could help with job creation, especially in the nearby Shanghai production facility.
Toyota Cuts RAV4 Production After Supplier Explosion Kills One Worker
One of the reasons I didn’t end up buying a Toyota RAV4 is that the idea of paying well above MSRP for a vehicle I might have to wait weeks for was not appealing to me. Toyota has not been hamstrung by bad products, but by the inability to produce as many as the market wants.
A supplier that provides springs for the Toyota RAV4 and Harrier had a rare explosion, which killed a worker and has disrupted production. This could impact availability of vehicles here in the United States.
After assessing the latest incident, Toyota Motor Corp. said on the evening of March 7 that it will suspend operations on three lines at two plants in Japan for the first shift on Monday, March 10.
The automaker will halt one of two lines at its Takaoka assembly plant, which makes the RAV4 and Harrier. It will also halt two lines at a Toyota Industries Corp. factory that assembles the RAV4.
The stoppages could impact output of RAV4 crossovers headed Stateside. Last year, Toyota sold 475,193 RAV4s in the U.S., and imported about 101,683 of them, or 21 percent of the volume.
A shortage of cars means nothing next to the loss of a human life, but if you’re in the market it’s something to be aware of.
What I’m Listening To While Writing TMD
Did you know that “Have You Ever Seen The Rain” by Creedence Clearwater Revival is a deceptively hard karaoke song? I tried this one out the other day and it was not as in my range as I initially thought.
The Big Question
What car do you see on the road that always makes you smile? For me it’s the Isuzu Vehicross.
The mighty Geo Tracker does it for me. My buddy at work just bought one so i get to see one everyday now. Also wait, the Great Orange One said that the tariffs would make everything cheap and great and bigly, all production of everything would be right at home where it should be and our economy will be “HUGE.” Im sure it will all turn around for the better very soon.
I’m sure USDM will build all sorts of vehicles I don’t want to buy just like the 1980s when I switched from the big three to a series of imports over the following 40+ years.
I saw a Sonett II on my way home yesterday and even exchanged a few words with the driver at a stoplight. I suppose this answers today’s question but mostly I just wanted to say that I saw a Sonett II on my way home yesterday and even exchanged a few word with the driver at a stoplight.
I used to see a fair few Sonetts back when I lived in Denver. Something I’ve always wanted since selling my Saab 900S.
They are fun. I used to have a 1969 Sonett V4 but at this point all I have is a 1967 96.
About 10 yrs ago, I saw a Delorean that was being DD’ed (at least on nice days) on the same route as me. If that doesn’t make you smile, you have no soul.
More recently, there was a Volvo Amazon I see in traffic every now and again.
And just last Saturday, there was a group of ~6 MGBs, presumably returning from a car show/meet up. 6 top-down MGBs enjoying a back road on a sunny Saturday afternoon in February is about as smile inducing as it gets.
Any car older than the 1940s. They are fascinating merging of metal, wood and simplistic engineering.
Got to drive a 1928 Model A. Surprisingly easy to drive once you understood the controls. Sharper steering than any domestic car from the 1970s. Didn’t want to drive it much over 45 MPH because the all-mechanical linkage brakes and fat bicycle tires made stopping less than confident. More confident than 1980s GM car brakes, but still poor.
Saw a classic Mini (BRG, white Cooper stripes) go by as I was waiting to turn into my street yesterday…I can’t not smile at one of those. A Lotus sighting will always make me smile, too.
Also A fiat 500 always brings a smile, especially in an outrageous color: say bright yellow.
Can I sit back and wonder how many of those suppliers, their employees and families voted for the Orange turd? That violin of mine is so small I can’t seem to find it right now.
Our country deserves the government it voted for. First time in my life I’ve seen one of the two major political parties actively trying to destroy itself and take all of us down with it. Sad.
another way to look at that would be: let us hope they succeed and sooner rather than later.
I hope it’s sooner, rather than later. We’re tied to commercial construction and it has come to a screeching halt for any decent new projects. Investors/Developers are just in wait and hold pattern right now. In process work is going to start running out soon and construction folk are going to be out of work.
Try the Golden Corridor. We’re tearing down neighborhoods to make room for 40-ft clear warehouses and gigantic data centers.
Or, let’s hope they suck at sabotage just as bad as they suck at everything else and they fuck it up royal.
It really is hard to find the sympathy. I get the first time around, but if people were paying attention in the slightest, they’d have known what we were in for. All the experts were saying it would be bad, and Project 2025 was no secret.
Who would have thought you’d get your faced bitten off by a leopard after voting for the “leopard biting faces off” party??
And that there is the problem, we suffer from an extremely uniformed electorate who can’t bother to Google something like “what is inflation” before they go “prices too high, me vote Trump.”
This site sure is berating or current president, I’m just surprised I didn’t see more of this with the last president. It’s sad to see that these are the options the two main parties come up with and even with that ridiculousness, very few citizens are willing to vote for a third party despite the two main ones burying the middle class and poor since the 80’s (when wage vs true cost of living peaked).
It would be nice, but unfortunately there are tons of roadblocks in place to prevent legit third party challenges both structurally and financially, especially since Citizens United. Maybe that will change, not holding my breath though.
yeah, I don’t see us changing to a Parliamentary Democracy form a Republic anytime soon.
Colbert summed it up:
“Kinda hard to feel a lot of sympathy for them,” Colbert said. “They ordered the turd soup, and then said, ‘Waiter, there’s turds in my soup.’ Then they came back four years later and asked, ‘Y’all still have that turd soup?’”
You can wonder, but it won’t matter. They have their heads so far up his ass that no matter what the consequences of his “policies” are, they will happily perform the complex mental gymnastics required to explain those consequences away as the fault of someone or something else.
He could go into their workplaces and personally fire them and they would still say something inane like “well this is just a necessary thing then for him to fix things.”
Reason within MAGA chuds cannot be breached.
Clean older base model cars, particularly Japanese ones from the 70s.
There is someone with a spotlessly clean mint condition red 80s Dodge Aries up the street from me. You can’t not smile when you see it!
Rare beasts indeed.
Absolutely anything older than say 1985 being driven, especially if it seems like a daily not a garage queen. I love a daily driven older vehicle.
What car do you see on the road that always makes you smile? E36 compacts
Any air-cooled VW product makes me smile, particularly the Beetle and the Bus. I see these on the roads surprisingly regularly considering how old they are.
Also, while I don’t intentionally keep track of where I see these vehicles parked, they capture my attention so much I can’t help but remember where I have seen them in the past. I will occasionally choose my routes based on where I know an air-cooled Beetle or hippie van might be parked (I hope that doesn’t make me sound like some kind of creepy classic car stalker?). Seeing an air-cooled VW just makes my day better, and it is worth going out of my way for that.
Outside of Cars & Coffee, I can’t think of the last time I saw a Beetle on the road, unfortunately.
It depends on where you live. I don’t recall seeing them on the road much at all when I live in the Midwest.
I see quite a bit of them here in Florida, though. They can be reasonably practical with our weather, not to mention air cooled VWs seem to be popular cars for cruising along the beach. We also have lot of older individuals with money to spend on toys, so classic cars of all kinds are much more common here than other places I have lived. As a fan of old cars, I am kind of spoiled here.
Smarts and iQs, every time I see one I just smile.
I think a Bugeye Sprite would make me smile too but I can’t think of a time I’ve ever actually seen one on the road.
Yet, every time they come up for sale, I swear they are $10k or less.
I’m wondering if they are temperamental in some way I don’t know about.
There’s a couple big offroad tire lifted Smarts around, they do it.
It’s almost as if electing a guy who could somehow bankrupt a casino and has a very loose grasp of reality might have been a bad idea. And these CEOs and execs who supported him shouldn’t be surprised by what happens.
You write this as if these CEOs aren’t keyed in.
I remember back between times of republican man babies as President when Wall Street, The WSJ, every CEO and all republicans were demanding CERTANCY of the business climate from the holder of The Oval Office.
100%
Hopefully, this coupled with a reduction in tariffs in the future will set us up for success, but 4 years is a LONG time.
I didn’t understand why the stock market rewarded Trump. It was as if every fund, trader, and the algorithm designers collectively forgot about what uncertainty was like. Now we’ve pulled back to where we were before the election.
The stock market has been moving away from P/E and fundamental analysis for 10+ years, more and more in favor of AI and algorithmic trading while using technical analysis (momentum based trading).
That never seems to work out.
I’m 71. Four years is not a long time. I will admit, in 2015 we bought 4 walls and a leaky roof when it wasn’t raining to start a coffee shop and bakery, and I then watched traffic quickly fall off going through town from 2016 on and that seemed a long time. It wasn’t. It was a short time and a huge amount of damage was done to the “lesser” people of this nation. When, in retrospect, even a weasel like Nixon did a few good and proper things, one finds that you cannot help but to consider the current republicans as evil.
Think of a major world leader typically considered evil in the 20th century and he (or his general regime) usually held onto power for about 20 years. I would not expect any real change sooner than that.
Hitler, the benchmark of 20th century evil became Chancellor of Germany in 1933. By 1945 he and his party were either dead, imprisoned or on the run. That’s *only* 12 years.
Mussolini was in power 21 years from 1922-1943 which fits your timeline
Stalin was in power from 1924-1953 nearly 30 years.
Mao Zedong 25 years from 1949-1976
So yeah, 20 years, give or take a decade.
Toss in a little Pinochet, some Ceaușescu, a Pol Pot and I’d say my math is close enough. Either way, don’t worry, it’ll only feel like an eternity.
100% agree.
Also, there is an OG Shelby Cobra in my neighborhood. I have no idea if it’s a replica or not, because the owner is ripping it around a tad every time I see it. It wouldn’t surprise my if it was the real deal, but even if it isn’t, it’s pretty friggin’ sweet.
Most anything older than the chicken tax exception makes me smile… unless I see it being driven in snow, then it makes me frustrated and mildly angry. I’m all for driving cars, just not in conditions that cause them to deteriorate faster than fast.
Land Rover Evoque or Nissan Murano convertible. All pleasure, no apologies.
Cars that always make me smile: old European sedans like Volvo Amazons, Mercedes 300Ds, Saab 900s, BMW Bavarias, and Jaguar XJ6s.
You just know that car has some great stories with some interesting owners.
I saw a Saab 900 on Wednesday – it made me smile! It still had the full Griffen on the hood ornament.
Businesses care much more about economic certainty and knowing what to expect than what their tax rate is. None of this is good for any businesses.
An XJ Cherokee will still make me smile (the last model year was 2001, in the USA at least). Also probably any 1980’s compact truck that is still out there doing truck things. I saw a Mighty Max the other day!
I don’t think the tariffs last 6 months. I don’t think they will last past April. I do think that these tariffs accomplish 2 things, though:
That’s not a great thing for many people, but it is what it is.
Like it or not, this administration is going to be about brute force. Whether it’s the Yoda kind, or the Vader kind, is obviously TBD.
There’s also the distinct possibility the president isn’t playing 4D chess and is, in fact, very stupid and has no idea what he’s doing.
What does chess have to do with anything?
https://www.quora.com/What-is-4D-chess-in-U-S-politics
I am aware of the concept. I didn’t mention it on purpose.
Mix 1 part simpleton with 1 part age-related dementia and 2 parts narcissistic personality disorder. Top with orange juice. Then flush twice.
You left out the herd of sycophantic fart catchers and sniffers he’s surrounded himself with to execute the ‘Grand Plan’ such as it is.
You forgot revenge, retribution, and remuneration. He already got a large chunk of the third from E-loon, and his cabinet appointments appear to be the second.
It’s this one. This is the reality
You forgot number
3. Chaos
That Isuzu definitely makes me smile, but I haven’t smiled in a very long time . Another one is the first gen Geo Tracker / Suzuki Sidekick. 2 door convertible of course.
It’s the SSR.
What if we made a vehicle that was half Trail Blazer, half Corvette, and also made it a 1950s looking hardtop convertible?
So goofy, yet so oddly cool. The kind of whimsy that post-bankruptcy GM no longer seems capable of.
Every time I run across an SSR for sale, I consider buying. It’s not practical, I don’t have room for it, but it’s just so fun that they actually made it.
It can keep golf clubs and groceries out of the rain, it can let the wind blow thorugh the area where your hair used to be, it had 3 pedals and 8 cylinders of Chvey small block up front.
I never understood the hate.
Also there was an old guy near me with a purple one for a while, it delevired on exactly its use case basically every day in the summer.
Slingshots make me smile every time. I wouldn’t own one, I think those owners are crazy from a lot of perspectives, but man it’s a good thing that vehicle and those buyers exist because the Slingshot brings joy.
My neighbors 2 doors down have a red one. They are super cool people and very laid back. Probably my favs on the whole street. Their dog is fucking bananas, though that is a whole other story…that medium-sized psychopath, lol.
I too like to see the rare Vehicross still on the road occasionally. Though I feel like it is mostly 60’s and 70’s muscle type cars that make me smile most. Or at least stop and appreciate them.