By the time this post goes up, the markets will have been open for a while, and you’ll probably have your fair share of people telling you that the chaotic tariffs announced yesterday are, shocker, causing chaos (If I’m wrong and the markets open higher, I’ll just delete this paragraph and no one will ever know). The opening shots of any war, even a trade war, are hard to contextualize in real time, which is why they call it the “fog of war.”
I’d like to do better than that. While confusion may reign when the first shots are being fired, the same advice applies at the beginning of a war as it does to the end of one: duck!
The Morning Dump today will be mostly about tariffs and their impacts, and my best chance to help you today is to give you something practical that you can do. Earlier this week, it was the idea that you should go buy a car ASAP if you want one. That advice still stands, especially as we enter an early period of price disruption when certain car prices might drop.
More importantly, though, is what to do about the car you already own. If you’ve got a car that’s not under some sort of warranty, you should get the parts you need for it now. Today. It’s time to hedge, and hedge hard.
What Was Actually Announced Yesterday
The video above is the full announcement of tariffs as part of “Liberation Day” and “Make America Wealthy Again.” Here’s a shorter version of why we’re doing this from The White House:
I, DONALD J. TRUMP, President of the United States of America, find that underlying conditions, including a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and U.S. trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits, constitute an unusual and extraordinary threat to the national security and economy of the United States.  That threat has its source in whole or substantial part outside the United States in the domestic economic policies of key trading partners and structural imbalances in the global trading system.  I hereby declare a national emergency with respect to this threat.
The whole proclamation is interesting because there’s a lot in there that you’d expect from a Democratic president with regard to the importance of domestic manufacturing. President Biden made a lot of similar arguments, and his response to the lack of American manufacturing was to offer the carrot of extra investment and extra tax breaks for companies that would expand in North America.
That takes patience and time, because whole industries cannot shift overnight, and the disruption of trying to do it suddenly has been deemed unpalpable to pretty much every president since Herbert Hoover. This current President sees an emergency and, like FDR, he doesn’t want to waste the moment.
At this event, President Trump held up a chart showing what kind of burdens various countries put on trade and explained how we’d respond in kind with “reciprocal tariffs.” This chart is interesting:
There’s a 72% tariff charge from Thailand, which somehow hasn’t come up yet on season three of The White Lotus. Then there’s a 97% tariff from Cambodia. Wow! Crazy. I’m starting to suspect maybe this chart is a little suspicious.
Oh, wait, there’s a formula:
To conceptualize reciprocal tariffs, the tariff rates that would drive bilateral trade deficits to zero were computed. While models of international trade generally assume that trade will balance itself over time, the United States has run persistent current account deficits for five decades, indicating that the core premise of most trade models is incorrect.
Ah, got it. So they basically took the trade differential between the two countries and then assumed that it was due to a trade imbalance caused by some sort of local tariffs/currency fluctuation/whatever. That’s bananas. Literally, because now the cost of getting bananas from Indonesia is gonna be 32% higher than it was, so you better learn how to grow some. Oh, and Cambodia, one of their three biggest imports to the United States last year was: “Articles of leather, animal gut, harness, travel goods.”
I’ve talked about the Theory of Comparative Advantage before, so go read that, but conceptually this is like me buying a car from Honda and then being mad that Honda did not give me the equivalent of $35,000 worth of something in trade. I have a huge trade imbalance with Honda right now, guys.
The full list is hilarious because it includes unoccupied islands in Antarctica. The penguins are pretty reasonable as, by these calculations, they’re only charging us a 10% tariff.
Is there an emergency? Is this creating an emergency? Let me start with the Bloomberg headline of the moment, which is “Trump Tariffs Set to Wipe Out Nearly $2 Trillion From US Stocks.” That doesn’t sound great.
Roughly $1.7 trillion is set to be erased from the S&P 500 Index when trading opens Thursday amid worries that President Donald Trump’s sweeping new round of tariffs could plunge the economy into a recession.
The damage was heaviest in companies whose supply chains are most dependent on overseas manufacturing. Apple Inc., which makes the majority of its US-sold devices in China, is on track to open down 7.7%. Lululemon Athletica Inc. and Nike Inc., among companies with manufacturing ties to Vietnam, are down at least 9%. Walmart Inc. and Dollar Tree Inc., retailers whose stores are filled with products sourced outside of the US, are trading at least 4% lower.
Few stocks in the US were unscathed with the biggest ETF tracking the S&P 500 on pace for its biggest decline since 2022. More than 90% of companies in the S&P 500 were trading lower at 8 a.m. in New York, with over half of its 500 stocks down at least 2% in premarket trading.
Trump take egg, now Trump take 401k, I guess.
Car Prices Might Not Immediately Go Up
If there’s some good news in this, it’s that the same people who are trying to put reciprocal tariffs on Southern Elephant Seals are giving automakers a time to adjust and, for the moment, are exempting USMCA-compliant goods. Automakers will still have to come up with a way to determine what kind of non-USMCA-compliant parts are in their cars, but it seems like the Maverick is saved.
Even with the massive uncertainty built into these tariffs, it’s not like car prices have to immediately go up by equivalent amounts, as Automotive News is pointing out this morning:
While President Donald Trump has imposed a 25 percent tariff on imported vehicles, in all likelihood, consumers will not see a 25 percent price hike. That’s because of complex factors including the amount of non-U.S. content in each vehicle, automaker calculus, dealer decision-making and loan agreements.
Cox Automotive, for example, predicts a 2.8 percent year-over-year increase in wholesale vehicle prices in 2025. Black Book projects a 5 percent increase in the average transaction price this year. Morgan Stanley predicts the tariffs will boost the average price of a vehicle by 11 or 12 percent.
The projections recognize that the tariff is not applied to the manufacturer’s suggested retail price and that the industry relies on sometimes labyrinthine systems to calculate the vehicle’s cost. The price of the vehicle is determined using a cocktail of market research, bills of materials, financial agreements, intuition and other elements. Even more variability enters the picture in the dealership lot, where prices vary widely by region, timing, personal relationships and the way buyers settle up with the retailer, a separate business from the automaker.
Because it’s an average, certain cars are going to suffer a lot while others might skate by with minimal disruptions. Carmakers can then decide if they want to cancel certain cars (almost certainly affordable ones, since those have the lowest margins), let higher-end models get more expensive, or average the costs across all their vehicles.
German automakers seem to be weighing all these options, according to Bloomberg:
Europe’s automakers are raising prices and preparing to shift car production to the US to try to protect themselves from President Donald Trump’s tariffs.
Volkswagen AG plans to add import fees to the sticker prices of its vehicles shipped into the US, indicating Trump’s 25% auto duties will have an immediate effect on Europe’s biggest carmaker. Volvo Car AB and Mercedes-Benz Group AG are looking at expanding local output to sidestep the levies.
All the automakers above have plants in the United States, so they can increase production here, which is part of the reason these tariffs exist. But they can’t build everything here, and it sounds like Volkswagen plans to use its window sticker as a form of protest to show how expensive everything is. I wouldn’t be surprised if we saw more of that.
I’m going to save talk of retaliation from other countries until we see who blinks first. Also, blowing up the entire global trading order is a lot to talk about in one TMD, so we’ve got time.
Conversely, automakers who are better positioned with regard to tariffs can take advantage of the situation, as Ford is doing by extending employee pricing to everyone and advertising big discounts.
The automaker is launching “From America, For America” on Thursday, the day President Donald Trump’s tariffs will be enacted on the auto industry. The campaign will run in traditional print media advertisements, television spots and social media, said Rob Kaffl, Ford’s director of U.S. sales.
As part of the campaign, Ford will offer its employee-pricing plan, known as the A Plan, to consumers on most of Ford 2024 and 2025 model year vehicles through June 2. Ford is also extending to June 30 the program that offers a free home charger and complimentary installation to those people who purchase or lease an all-electric vehicle.
Again, go buy a car while the buying is good. None of the cars that have already been imported to the country are subject to these tariffs. They’re not retroactive.
Prices On A Bunch Of Stuff Will Go Up, Mostly Because Companies Can Raise Prices
The big concern I have in all of this, besides the Schrödingeresque nature of these tariffs, is that automakers and other companies are always looking for a reason to raise prices. Always. I refer you to my Trimflation article, which gets into the work of Economist Isabella Weber, and the idea that once companies realize they can raise prices if they all raise prices together, they’ll now probably do it.
Tracy Alloway was thinking about the same thing, and pointed out as much in her Odd Lots newsletter yesterday:
[T]ariffs provide yet another convenient reason for companies to raise their prices. Many customers are aware that tariffs are coming, and some of them also believe that tariffs will be good for the country; they’re willing to accept the definite short-term pain in exchange for the possibility of long-term gain. (Of course, I should note here, that many of the people who support the tariffs also tend to be those who have the least purchasing power).
So no matter what happens today, there’s an argument that the inflationary impulse is here to stay. Uncertainty over policy breeds capacity issues, and tariffs breed change, and all of that is a potent peg for companies to push price and preserve (or even improve) margins.
Carmakers may not attempt as they’ve got a lot of capacity they have to use and, if they assume this isn’t a long-term policy, might use the opportunity to pick up market share. Parts companies, though? Parts companies may not have the same philosophy.
This Is Why You Should Get Your Car Fixed Right Now And Stock Up On Parts
I’m not going to say the sky is falling. Maybe it’s not. Maybe the stove isn’t hot. I refuse to look at my investment accounts right now, because I’m young enough that I view this as potentially a great buying opportunity.
However, concerned that this was coming, I did a lot of work on my old BMW and bought a new car while the deals were good. Why?
It’s rare in life that you find yourself in a position where you absolutely have to buy a new car. If you’re reading this website, you probably already own a car, and you can keep that vehicle running indefinitely. If new car prices go up, your old car is going to become more valuable, as happened during the pandemic.
Unfortunately, the price of keeping that car on the road is almost certainly going to go up. If you need a car and your car breaks down, you have to fix your car. You don’t really have much of a choice. Do you know where the parts for your car come from? Those engine mounts for my BMW come from Germany. Because they’re already in a warehouse in Connecticut, they aren’t going to be more expensive, but when those run out and they have to be reordered…
To make matters worse, the disruption of global trade risks potentially blowing up the value of the dollar. If that happens, not only will imported parts be more expensive because of tariffs, anyone buying in $$$ will probably have to pay more.
There’s a scenario where maybe this doesn’t happen. Where mechanics around the world decide to eat the cost of those parts to make you happy, or where all of the parts for your car are made in the United States. Crosley owners, rejoice!
What I’m Listening To While Writing TMD
The premise of Pulp’s “Mis-Shapes” is: What if all the loner weirdos got together and got revenge on all the cool people? Unfortunately, loners don’t group together that easily. It’s a beautiful dream, though.
The Big Question
What do you need to do to your car and where do the parts come from?
Top Photo: Depositphotos.com
I think I’m not dreading the future market for cars, electronics, and appliances as much because I already repair everything I own beyond any reasonable, commensurate value anyways and have hoards of parts (and skills) to bodge anything else I need to do. General life consumables and building materials, sure. The extension to the house and basement re-up I want to do will obviously become more expensive.
Since my flock consists mostly of 7.3 International powered E350s, it’s fairly apocalypse proof and parts tend to just sprout out of the ground in abandoned fields and sheds.
The Daily Van just passed 150K, and I was briefly thinking of selling it before it commits Chrysler, but it really hasn’t exhibited any problems. I already have RCOH parts ready for it like alternator, water pump, coil packs, starter, steering pump, serpentine drive, etc. but it hasn’t needed anything yet. At some point I may do a single weekend beast mode service anyway just so I don’t have to eventually do things one by one.
The Mitsu van is a 4-cylinder 80s Japanese truck and will simply run until the end of refined petroleum availability.
“National security”
What an absolutely bullshit excuse…that’s all it is. The word security when you first think of it you think of safety, the military,etc.
I get that it CAN also be related to the economy in that sense, but at least just fucking SAY that instead of playing word games and games w/ citizen’s lives. When “national security” and “emergency” is used too much by these dummies and in the mainstream media, people are desensitized to it so when there IS a real life-threatening emergency, people don’t take it as seriously. They are just using it as an excuse to get what they want and wreak havoc on everything for no reason other than for themselves. As mentioned they probably still don’t know what a fucking tariff is and are still in the learning stage of what the fuck it actually means!
“There are too many car brands…too many…just the other day I read on some auto pee on website that there too many car brands…especially electric ones. They have to go away…it doesn’t make sense…they have to close. I’m announcing this tremendous new series of tariffs to get rid of them…it’s going to be a great thing…the best ever.”
Just did shocks and sway bars on my Miata
Wife got a new Audi Q5 in Feb
I paid to get out of my 4XE lease and bought a used Accord last week.
I think we’re ok for the time being. I would like some smaller wheels for the Accord but that can wait. Tires are good so we’re fine for now.
Dear 78 million dipshits,
Thanks for the national sales tax.
Signed,
Non-idiots
If you think about it, the Republican Party just imposed the most massive tax hike in American history! Of course that political party could come to its senses and immediately undo the damage but they won’t – so they own this as much as the Stable Genius. So much for decades worth of political branding – vanished in a single day.
The sad part is that they are totally invested into this delusion and trying to justify his actions any way they can.
This is all nucking futz. The fact these reciprocal tariffs are based on some vague estimation about trade imbalance and not on actual tariffs imposed by foreign countries is insane to me. They literally spit balled some numbers up there until it “felt right” for a news conference.
Meanwhile, we’re going to have to suffer through higher prices and plummeting 401K valuations because the administration arbitrarily decided to blow up the system for no reason.
I have a bunch of new suspension parts for the 4Runner already, just need to get around to installing them. The only other things I’ll need is plugs and fluids, so that’s not that big of a deal.
It just occurred to me earlier today that maybe I should have bought tires. I’ll need a set this year, and while I try to buy US made tires, the raw materials are likely imported. Like tires aren’t expensive enough already.
I just did a major service on my Type R so it should be good for a while. (Two-piece rotors, spark plugs, pads, brake fluid, autocross tires) Our CX9 will be due for plugs and needs the forward sensing camera replaced. I already have the stupidly expensive camera, and plugs are cheap and ordered. My NA Miata just keeps running out of spite at this point.
I like the sounds of your stable.
It’s a pretty great set up, but we’re planning on replacing the main family hauler at some point this year. Bit of a toss-up on what 3 row we will get though.
Not my car but I just picked up a used Honda 4×4 ATV for work around the house and I plan on going over it pretty good this weekend to see what it needs and ordering the parts.I haven’t had an ATV for years so not exactly sure where I’m ordering parts from yet but I’ll scour EBay for new OEM parts first.
Most of the parts on my Kawasaki come from eBay and Amazon.
What do you need to do to your car and where do the parts come from?
Oil pressure sensor
Brakes
Struts
Swaybar links
Tires
Transmission service
I get it all from Rock Auto. Except for fluids. I get those from local parts stores.
I recently purchased a new vehicle and downsized to just that one (though I regret selling my pickup…and I suspect it will be appreciating in value soon), so I should be able to ride this out without any non-warranty repairs, I hope.
I really feel bad for the couple of guys I worked with who just retired. A hit to your retirement accounts right when you start drawing from them is rough, especially combined with increasing prices of everything.
My parents were supposed to retire at the end of the year. They’re none too pleased.
Yeah, my dad should have already retired, but he shifted his investments to CDs or something when Biden was elected and missed out on some good growth, then this. At the rate he’s going, I think he’ll be set to retire about 5-10 years post-mortem.
I don’t have a lot of sympathy for him, because he just will not accept that the GOP has screwed him repeatedly. He’s a log trucker and has bought into the idea that environmentalists are after him, while deregulation has in fact done him more financial harm than the tree huggers ever could.
Bought brakes for the Porsche today from Pelican. Had planned on getting them done mid Summer but got the parts now.
The best thing you can do right now is wait until tomorrow and buy a shit ton of the S&P index. It’s basically free money at this point that will show itself in a year.
Source: just trust me bro.
I mean, the advice isn’t too bad. Buy when the market drops, then hold until it recovers. If the markets never recover, the USD has probably crashed, too, so it’s not like you’re out anything of real value.
Please explain in further detail.
If you’re talking about a pump and dump scheme I agree with you.
Follow the money and who is getting rich from the on and off tariffs…..
It’s pretty simple. The index was at 6200-ish not to long ago. It’s at 5400-ish now. The market has “lost” trillions, but those companies aren’t going away, or if they do, it will rebalance as usual.
I’m not saying that anything is a lock, but the odds just got significantly better to cost-average a way to a better year.
No big conspiracy, just my thoughts from an individual perspective.
As an aside, if you do want a conspiracy, look into who won big on the “triad” of pharma/big factories (gm, ford, et al.)/mid-level distributors that got the Covid vaccine out. All of their stocks correlated to the upside, as did certain members in power that signed those deals.
I’m not all fired up about it, it happens every year or so. Plenty of people get super rich on quick change agreements.
You mean operation warp speed ?
Trump bragged at the time of how quickly he rushed the vaccines out ,now he hates them .
This really isn’t the format to argue politics and I’m sure over a couple of beers we’d be good friends.
Somebodies getting rich and it’s not the average American and I’m a average American.
I’m right there with ya, bud!
We all lost our butts today so let’s have draft beer and not craft beer lol
Stroh’s Original and Coor’s Banquet bottles on the house!
This is exactly what the rich are doing. I would if I could, but I don’t know how.
It honestly takes about 5 hours of research on the basics of index funds.
It’s no different then learning a car, or teaching a child. Learn the alphabet and go from there.
It’s not all that daunting to understand how to make/preserve/save your money.
The problem is that you do need some liquid capital that isn’t already invested. I do feel a bit silly for not dumping my Apple stock yesterday and re-buying today or tomorrow.
You can’t think like that! lol. Holding individual stocks is a whole other thing. For instance, I “missed out” on roughly $300k on $DOGE (during Covid) back in the day. Oh well, I sold it for a $250-ish profit. That’s better than a kick in the junk.
Day traders are fucking insane.
I’ll take a re-balanced index all day over a single gamble.
I’m not a dude to put all my chips on one number in roulette. It doesn’t hit often.
Totally agreed. I do sometimes think about how I made a bitcoin wallet in 2013 and was gonna buy a few for $164 each… and then just didn’t.
It’s not a matter of not knowing how, it’s just a matter of “I don’t have enough spare cash to care” and “I genuinely don’t believe in the stock market”. I say that in the sense that I believe in labor to build wealth, not stealing from others, which is all the stock market is, a way for the wealthy to steal from the poor.
(no need to comment, I know what I just said, and fully understand the intellectual side of investing and building wealth, I just could not care less about it all as I make enough money to feed myself and my family, and that is enough to make me happy. I fucking hate the stock market and what it has done to society, despite knowing the benefits, which I feel do not outweight the faults, but that is just me, I will die either poor with with my last dollar in my hand at my last breath)
Most people don’t have a ton of money on the sidelines and timing the market doesn’t work well. I actually could see this coming yesterday, but one day is not enough notice for me to sell and then potentially mess up the buy timing and be left behind. Also, there are huge tax consequences for selling all my stock/mutual funds, when I’m just going to buy them back some time soonish again.
“What Was Actually Announced Yesterday”
I can tell you… What was announced was a bunch of economic insanity and bullshit that will Make America Less Relevant Again… MALRA.
“What do you need to do to your car and where do the parts come from?”
I’m in Canada… so I should be good. Car parts aren’t part of our counter-tariffs against US-made goods
https://www.canada.ca/en/department-finance/news/2025/03/list-of-products-from-the-united-states-subject-to-25-per-cent-tariffs-effective-march-13-2025.html
But for all the American Autopians… bookmark this article and re-read before you vote again in the future so you can remind yourself what the Republicans are actually all about vs what they CLAIM TO BE/LIE about. .
Parts for me:
74 Alfa GTV2000: Needs a Spica rebuild and suspension rebuild. I have not sourced parts yet.
87 Vanagon Syncro: Peloquin diff came apart last month. Just dropped the trans last weekend and will see what it needs. Will also replace fuel tank sender with a new one from GoWesty while the transmission is out.
03 E-350: Needs rust repair and a windshield. Parts usually come from Pic-n-Pull when I am in the lower 48 with a vehicle. I plan my own sheet metal repair around the fenders. Local steel supplier ($$$). Paint comes from my closest FinishMasters (made in USA with global components).
04 Jetta: Needs nothing.
05 Massey Ferguson: Hoping injectors arrive before the de minimus tariffs for items from China kick in (May 2)
08 Silverado: Needs everything. Sourced a hydroboost from eBay. Full set of front ball joints from eBay. Once I figure out the intermittent oil pressure light, I suspect the sender will come from eBay. Will need six(6 !) summer tires this year; they will come from Costco in the very near future. Looking to buy ASAP.
16 Touareg: Should replace diff fluids and transmission fluid (bought parts). Need a timing chain kit here in the next 50,000 miles, but have not sourced these parts; may drive until it jumps time and find lower mileage engine. Have maintenance parts from Europarts. Will try to get a set of Hakkapeliittas this month (eBay source) if they still have stock.
19 F-150: Just accumulated all parts for a timing belt change. Sourced parts from Poland for the belts, some parts from the Ford dealer, a tensioner from Europarts, and a Dayco tensioner pulley from Amazon. Will try to find a set of Hakkapeliittas this month if the eBay distributor has them in stock. Also need to find a replacement for a raven-damaged grille shutter literally from anyone who will ship to Alaska. I will start by re-repairing it with my plastic welder and two part epoxy from FinishMasters.
22 MX-5: Needs nothing.
To the best of my knowledge, all of my parts (except for the Silverado ball joints and some paint) comes from overseas.
No, don’t stock up on parts. I have so many spare parts from bikes and cars that I no longer own. I now buy them only when I need them.
Are you at the point where you could take all those spare parts and build a car or bike? No? Then you NEED more parts!!!
I know the feeling …..
Let’s see my Vsport needs new front tires then sold. My Miata needs new wheel bearings, brake pads, and an O2 sensor. Luckily I have all of those except the brake pads I just need time to install. My 85 C10 has a list of pending projects too long to list here. I need lots of parts to complete the big brake install, refurbished vent windows, new interior pieces (dash, door panels) you get the idea. I then need to purchase another sedan. Hoping I can find an acceptable Evo 9 I can actually afford. No idea how the tariffs might effect any of this and quite frankly more worried about how they might effect my employment.
That comparison is borderline offensive.
Please tell me they’re putting a Trump “I Did That” sticker on every one of them.
Why not? The oil industry’s been doing it that way forever. Any bad news spikes prices higher, any good news they wait until the supply of expensive oil is exhausted before lowering prices. They might not raise MSRPs right away because that would be too obvious, but I bet incentive spending gets smaller almost immediately.
It wouldn’t surprise me a bit if that’s the endgame (assuming there is one) for this stupidity. Implement tariffs just long enough to drive price increases, then remove them and let giant corporations pocket most of the difference (they’ll make a show of lowering prices, but not back to pre-tariff levels).
Yes! I hope cars and other goods have a line item calling out the Trump import tariff to show everyone exactly why the cost is higher. hate the high prices, here is why.
Also, this will be just like covid. prices will go up, but when they eventually are removed the price will stay the same.
So I says “Gas prices are like a ratchet…”. My friend says “You mean like a racket…as in racketeering you dumb rube”. I says “No, like a ratchet, the prices only goes one way.”