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Thread: Political Phrase of the Day

  1. #31
    Volcano Tamer PA5COR's Avatar
    Join Date
    Feb 2009
    The Netherlands
    One of the reasons the counter tariffs of the EU will hit the rust belt and Trump "belt" the hardest.
    The car tariffs will hit the USA just as hard, if not harder as the EU.
    According to Bloomberg, the proposed trade barrier would also hit the US economy and could eventually result in "upwards of 180,000 jobs lost." Moreover, the total impact could reportedly be doubled by EU's countermeasures.
    Most if these USA job losses will happen in Trump territory the "rust belt" making voters on him less happy.

    Why it won't work:
    "There is no legal justification," said Sherman Robinson of the Peterson Institute for International Economics, who added that new tariffs would be immediately challenged at the World Trade Organization (WTO).

    The move would threaten to wreak havoc on the global auto industry, which has built supply chains that crisscross national borders and limit the effectiveness of blunt instruments such as tariffs.

    BMW (BMWYY), for example, builds hundreds of thousands of cars each year at its massive factory in South Carolina, the company's biggest in the world. The German automaker produced 371,000 vehicles last year in the US, 16,000 more than it sold there, according to Germany's Center for Automotive Research.

    Mercedes-Benz, which is owned by Daimler (DMLRY), built nearly as many cars in the US as it sold in the country. Both automakers, which have invested billions in the US, export cars made there to other markets -- and they could be hurt by any retaliation from America's trade partners.

    Meanwhile, American automakers could be hurt by tariffs on cars made abroad. GM (GM) sold 3 million cars in the US last year, but it made just 2.2 million vehicles in the country. That means it imports thousands of models each year.

    "It would be extremely difficult to decide what is in fact a European car," said Robinson. "It will mess up the industry globally."

    Analysts said that trade measures targeting auto parts would be even more disruptive than tariffs on completed cars. It is common for auto parts to cross several national borders before reaching the final assembly line.

    "Anything that disrupts those supply chains is very damaging," said Robinson. "It cannot be in US interests to touch any of those value chains."

    The fallout from new tariffs would be difficult to contain. The US has become an attractive destination for investment, with companies such as Toyota (TM) choosing it as a place to build cars and export them to other markets.

    "Once you start going down this path ... you damage the whole investment environment," said Meltzer. "There are losers on all sides."

    Experts said negotiations with the EU could yield better results. Cars built in America currently face a 10% tariff when they enter the EU, while vehicles shipped from Europe to the US are charged 2.5%, except trucks and heavy goods vehicles that are taxed at 25% already.

    Tariffs would do nothing to make US cars more competitive in European markets. But getting the EU to drop its tariffs below 10% would help American models appear more competitive.

    "That is exactly the kind of thing you would discuss with the EU," said Robinson.
    "If the Republicans will stop telling lies about the Democrats, we will stop
    telling the truth about them." - Adlai Stevenson (1900-1965)
    Im not liberal/conservative, Im anti-idiotarian.
    At some point in the last 20 years, the left moved to the center, and the right moved into a mental institution

  2. #32
    Volcano Tamer suddenseer's Avatar
    Join Date
    Aug 2009
    The prairie jungles of ohio
    EMBARGO is O GRAB ME backwards.

    cul de n8tb
    "Sadly, it always takes a few martyrs to get the ball rolling." Colonel Tim Boldman 2001
    "There are no differences but differences of degree between different degrees of difference and no difference."--William James
    "Science flies you to the moon. Religion flies you into buildings." Victor J. Stenger

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