[M3Sleeper]

Originally Posted by msej449

An estimated 50%-60% of the parts used by the Spartanburg plant are imported from outside the USA, from countries targeted by the Administration’s tariffs. If things stay as they are, this will inflate the price of vehicles. In 2024, the plant exported over 225,000 vehicles to countries targeted by tariffs, including China and Canada. The idea that the complex supply chains involved in the plant’s manufacturing can be quickly reshored back to the US in less than 5 years seems optimistic. And the idea that recipients of its exports like Canada and China are just going to do nothing to retailiate is also optimistic. It may work, but it seems a very risky experiment.

I'm not sure why you think it's okay for China to rip the U.S. off and Canada is off the deep end so let's not bring them into the discussion.

If we never trade with Canada again that would not affect our country. Canada leadership is running the country into the ground and creating poverty far and wide. Taxes on taxes on taxes on the people.

[NGT2]

Originally Posted by tsbrown

I love what BMW is doing there. Tried to get hired there 35 years ago when they were just starting up a few years after graduating with my engineering degree at a nearby well known university. Fate had different plans. We’ve owned 4 vehicles built there, 2 X5s and 2 X3s. BMW figured out the global supply chain priorities decades ago and are reaping the benefits. Largest $ exporter of autos each year for many years. We need more of that.

Yep. And they’re decision to go the way of allowing customers to choose their powertrains was a good move too.

[Pickle of the Turk]

Originally Posted by M3Sleeper

I'm not sure why you think it's okay for China to rip the U.S. off and Canada is off the deep end so let's not bring them into the discussion.

If we never trade with Canada again that would not affect our country. Canada leadership is running the country into the ground and creating poverty far and wide. Taxes on taxes on taxes on the people.

Fascinating world view, maybe it's time to trade in the M3 for a CT5 Blackwing?

[msej449]

The tariff differential between the USA and the EU is about 3%-4%. So yes, there’s a case to say that there should be a small adjustment. And yes, we can all agree that China is a big threat given their advantages in raw materials, cheap labour and vertical supply chains.

But my point is that the current US tariff initiative is like using a machete to do brain surgery.

You could easily rebalance EU/US trade over 3-4 years through the WTO. There was no need to do a blanket, massive tariff imposition on the rest of the world. Why tariff poor African countries that supply coffee when they can’t buy many US goods and the US hasn’t got the climate to grow it’s own? Why tariff the UK when UK/US trade is effectively in balance? All it’s done is to drop everyone’s 401(k)s, inject inflation to the economy, and make a load of previously not-very-cooperative EU states collaborate to reduce US imports.

In relation to the Spartanburg facility, surely this represents the pinnacle of free trade and globalisation? A foreign company investing in a local facility and local jobs, ordering parts from local suppliers where it can, that itself exports $billions of vehicles to the rest of the world. Except that now, this will be compromised: European, Canadian and Chinese potential buyers will look elsewhere. The 60% of parts coming from Canada, Mexico, Germany and the rest will cost more and so prices will rise to US consumers.

It’s just puzzling to an outsider - while there are some, relatively minor concerns around trade imbalances (and yes, a major issue with China) demolishing 75 years worth of free trade and globalisation doesn’t seem to have any upsides. And as things stand, it’s already cost US 401(k) holders a load of money, is pushing up prices and reducing American global markets.

[WilcoJunoHotel]

I like the photo with all the Spartanburg SC employees out front but where is the photo of all the assembly robots? Don't they need some love/recognition? We don't need any "I, robot" retaliations.

[tsbrown]

Originally Posted by msej449

The tariff differential between the USA and the EU is about 3%-4%. So yes, there’s a case to say that there should be a small adjustment. And yes, we can all agree that China is a big threat given their advantages in raw materials, cheap labour and vertical supply chains.

But my point is that the current US tariff initiative is like using a machete to do brain surgery.

You could easily rebalance EU/US trade over 3-4 years through the WTO. There was no need to do a blanket, massive tariff imposition on the rest of the world. Why tariff poor African countries that supply coffee when they can’t buy many US goods and the US has at the climate to grow it’s own? Why tariff the UK when UK/US trade is effectively in balance? All it’s done is to drop everyone’s 401(k)s, inject inflation to the economy, and make a load of previously not-very-cooperative EU states collaborate to reduce US imports.

In relation to the Spartanburg facility, surely this represents the pinnacle of free trade and globalisation? A foreign company investing in a local facility and local jobs, ordering parts from local suppliers where it can, that itself exports $billions of vehicles to the rest of the world. Except that now, this will be compromised: European, Canadian and Chinese potential buyers will look elsewhere. The 60% of parts coming from Canada, Mexico, Germany and the rest will cost more and so prices will rise to US consumers.

Not to nitpick but the numbers I’ve seen are different. Willing to look at a better source if this is incorrect….
US import tariffs for autos is 2.5% vs EU of 10%
US sales tax of 6-10% depending on state vs EU VAT of 18-22%
Net difference of about 20% higher in EU.

Regardless, this could be handled much better, more targeted and strategy communicated much more clearly. Most brands have been assembling cars, SUVs, trucks in the US for decades, bringing much of their supply chains with them. Surely they have achieved most of the desired locally produced outcome already and optimized much of that. I think even if there is parity on tariffs and taxes encouraging other countries to import more American product (GM, Ford, Chrysler) it won’t change much until the big 3 make more globally desirable products. Their massive pickup trucks are oversized for even the US, but people here love them. BMW Spartanburg seems to be a model of how to do it right.

[Bambazonke]

Originally Posted by tsbrown

Not to nitpick but the numbers I’ve seen are different. Willing to look at a better source if this is incorrect….
US import tariffs for autos is 2.5% vs EU of 10%
US sales tax of 6-10% depending on state vs EU VAT of 18-22%
Net difference of about 20% higher in EU.

Regardless, this could be handled much better, more targeted and strategy communicated much more clearly. Most brands have been assembling cars, SUVs, trucks in the US for decades, bringing much of their supply chains with them. Surely they have achieved most of the desired locally produced outcome already and optimized much of that. I think even if there is parity on tariffs and taxes encouraging other countries to import more American product (GM, Ford, Chrysler) it won’t change much until the big 3 make more globally desirable products. Their massive pickup trucks are oversized for even the US, but people here love them. BMW Spartanburg seems to be a model of how to do it right.

Believe it or not there is a growing market for the massive pickup trucks here in Australia as the Asian made pickups cannot tow over 3500kgs without compromising their own load capacity which varies from 500kgs to 1000kgs
None of the big 3 and Toyota with their Tundra are prepared to make a RHD model for the Australian market so they are fully imported from the US then partially stripped down converted to RHD using local parts and sold at luxury car prices

Maybe if US manufacturers paid attention to what foreign markets need desire they would sell more cars outside the US

[tsbrown]

Originally Posted by Bambazonke

Believe it or not there is a growing market for the massive pickup trucks here in Australia as the Asian made pickups cannot tow over 3500kgs without compromising their own load capacity which varies from 500kgs to 1000kgs
None of the big 3 and Toyota with their Tundra are prepared to make a RHD model for the Australian market so they are fully imported from the US then partially stripped down converted to RHD using local parts and sold at a luxury car prices

Maybe if US manufacturers paid attention to what foreign markets need desire they would sell more cars outside the US

and they probably won't <sigh>, what a missed opportunity.

[Vindicator3]

Originally Posted by tsbrown

US import tariffs for autos is 2.5% vs EU of 10%
US sales tax of 6-10% depending on state vs EU VAT of 18-22%
Net difference of about 20% higher in EU.

First line omits light trucks, where the US has a much higher import tariff.

Second line is apples and oranges because US sales tax and EU VAT apply equally on all vehicles regardless of where they are built. Neither is a point of discrimination between domestic and imported products.

[msej449]

I don’t understand the point I’ve often read in US articles re VAT - VAT is a just a retail sales tax, on everything. If I buy a vehicle entirely made in the UK I pay exactly the same VAT as when I buy a vehicle that’s imported.

And yes, the 3%-4% EU tariff premium over the US that I quoted was an average. So it’s made up of a mix of zero import tax goods through to high import tax goods.

But that’s exactly what the WTO was set up (by the USA) to handle: arguments about tariff and trade differentials.

For example, US truckers drive haulage cabs that are conspicuously 15 years behind European designs, and are more expensive. That’s because there are tariffs on European haulage cabs, plus a range of legacy federal and state regulations that are onerous for foreign suppliers to comply with. So truck manufacturers in the US are insulated from foreign competition. Cue a WTO argument between EU and US trade negotiators where reduced barriers to US car imports (or some other specific product) are traded for reduced American barriers to EU truck imports. Of course, there will be downsides. US truckers might get cheaper, better trucks but US truck manufacturers take a hit. EU customers might get a cheaper better {whatever}, but local EU manufacturers are hit by American competition. But that’s the art of the tariff deal.

And don’t forget about services: There is a $119billion annual difference in services between the US and EU, in favour of the USA. So all these shenanigans have done is make the EU states turn their attention to that and look at how they will retaliate on services if they’re forced to lose out on products.

[ubercruise]

Originally Posted by Bambazonke

Believe it or not there is a growing market for the massive pickup trucks here in Australia as the Asian made pickups cannot tow over 3500kgs without compromising their own load capacity which varies from 500kgs to 1000kgs
None of the big 3 and Toyota with their Tundra are prepared to make a RHD model for the Australian market so they are fully imported from the US then partially stripped down converted to RHD using local parts and sold at a luxury car prices

Maybe if US manufacturers paid attention to what foreign markets need desire they would sell more cars outside the US

Aren't the F-150 and Ram available in Australia?

[Zyvin]

Wow, I remember when we had a big party at the plant ‘cause we’d built 100k Z3’s, lol. How time flies.

[Bambazonke]

Originally Posted by ubercruise

Aren't the F-150 and Ram available in Australia?

Yes they are but are partially stripped down and converted to RHD in a former Holden? or Toyata? factory in Victoria. Australia does not assemble cars or trucks anymore. Everything is now imported from either Asia, Europe, South Africa or North America