Twenty Percent, Twenty Five Twenty Five Thousand Dollar, One Hundred Percent discussed on This Morning with Gordon Deal

Automatic TRANSCRIPT

Imported cars every year and a twenty percent tariff on the value of the car just means the price the cost of the car would go up by twenty percents that's almost half of the entire car market in the united states so twenty five twenty five thousand dollar car would cost something like thirty one thousand with the new we you know if it's something like this were actually to happen we would see major increases across the board in imported cars and then i think because if such a big chunk of the market actually goes up in christ i think even domestically produced cars would go up in price because the manufacturers would be able to raise the prices because the competition suddenly that much more expensive all right so you don't think that this would mean the suddenly we'd start buying more fords gm's and chrysler's no and in fact there's kind of a misnomer about what a domestic car even is you know there are thousands of components in a car and there is no car there's not a single one car that is one hundred percent source and built in america so you know the most you can get is maybe seventy percent built in america you know the engines come from outside the united states the transmissions come from outside the united states and by the way virtually every foreign based automaker has plants in the united states in this has gotten to the point where vehicles such as the honda odyssey minivan are among the most american cars because of all the american content in those cars so and then and then you have general motors vehicles that are produced in canada you have ford vehicles that are produced in mexico in those are technically imports that would have to get that would get slapped with this new twenty percent tariff so this is really really complicated and it is certain to have all kinds of unintended consequences that would not be good for the us economy or for the auto companies we're speaking with yahoo finance columnist rick newman about his piece entitled the car prices would soar under trump's latest tariff plan does manufacturing get a boost as intended here by the trump administration no i mean it's hard to see how it doesn't mean general motors actually filed a comment with the commerce department on where which is maintaining a docket for this and they said we would end up smaller important employing less people if if we had these terrorists in i mean the first thing that sort of simplest concept here is that when the price of something goes up people buy less of it so if you're basically just putting a twenty percent tax on on a bunch of products in the marketplace sales are going to go down so people are just going to buy fewer cars they will probably be some people will be more likely to buy a used car prices would go up to because demand would go up in the supply of cars in the market that would end up being sold at us would go down so you know when you have the simple simple dynamic where the price goes up people by less you know it's possible that some years down the road you know after companies have reorganized air supply lines which would take a long time you could end up with more domestic production but you'd still have fewer people buying cards because they'd be more expensive do you get the sense that with all the debate happening at some point and perhaps soon everyone re holsters their guns with regards to the thing i think that's a big question markets are acting everybody's trying to figure out how does this end with a bunch of threats were does trump actually go further with this and you know the indication is that he really means it so he threatened to could new tariffs on chinese imports and he has in fact on that and china as everybody predicted has put the same degree of tariffs on the same amount of us exports into china so the question is how does this end and where does it end and i nobody knows the answer i mean you know how much will is willing to harm us economy in pursuit of you know he sort of obsessed with tariffs and he wants the us trade deficit to go down it's not gonna go down but he seems he seems hellbent to try and i just i have no idea where it makes rick yahoo finance columnist rick newman who's based in new york.

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