Right this moment I don't think they have anything being built in the Small platform within the US. That might make it pretty difficult and costly to incorporate that into the Curly Plant Shuffle they're doing. But right now it's not like it was ever intended for US production, and frankly FCA is working hard to maximize their use of US production. Yeah, some things might get built in Mexico, but they're not "sending jobs" there, and every model they "send" there is freeing up production to be retooled to build something else in the US.

It'll be interesting to see the back and forth on that.

 

While not "sending" jobs to Mexico, potential jobs that could be added to the US workforce are not being added when small car production moves to Mexico.
I'd greatly prefer a Mexico built car to one from Turkey, but I'd be happier with one from the US or Canada (in that order). Time will tell - I think this is all far from settled.

 

Thanks for mentioning Canada, @valiant67 .. everyone's so het up about those darned Mexicans that it's easy to forget how many of FCA's US cars start life in Ontario.

The protectionist argument ignores one big fact: it's not simply a choice between "build it here" or "build it there", there's also "don't build it at all", or "don't sell it here". Those last two are economically damaging if you live in "here", but they're very common outcomes when you try to restrict international trade in this way, and they hurt the US-based suppliers who would have built the parts for those "foreign" cars.

 

GM replied to his tweet to inform him that not all Cruzes are built in Mexico.

If Mr. Trump wants to severely handicap the US auto industry without working WITH them, that's his option.

I'll keep my additional personal opinions on Mr. Trump to myself.

 

Because this thread has the potential to be very, very politically charged, could the mod's please move it to a more appropriate section? Or, enforce the "no politics" rule very very strictly within this thread?

That said, just throwing up some tariffs isn't as easy as it sounds.

Trade agreements are structured for just such scenarios. They prevent new folks coming to power and changing the conditions of the agreement. So don't believe what you hear or read; do your research, as I do.

Anyone thinking they can just walk in and willy nilly, throw up a tariff wall, knows nothing about trade law. The trade agreements can be renegotiated, sure, but that is a long and laborious process.

I agree, trade agreement a need to be updated from time to time as conditions change. Overall, though, trade agreements tend to favor the US. Other countries are willing to give up a lot, in order to have access to our markets.

If trade agreements are to be renegotiated, then the question that needs to be asked beforehand, is,"what are the parties involved willing to give up, in order to retain access to US markets."

Also, foregoing the ratification of trade agreements, says that you are unwilling to grant a certain amount of access to your markets. That is fine, but you have to careful, as the markets that are part of the trade agreement will have more access to other markets within the same agreement, but your market will be left out. You will not benefit from the agreement, others will. You have to ask, is bypassing the other markets worth protecting your market.

Again, the pan pacific trade agreement will happen, with or without the US. It was structured to account for US non participation. The agreement also had heavy US favoritism. US companies could sue other counties, without those other countries having the same recourse. Very US biased.

 

Because this thread has the potential to be very, very politically charged, could the mod's please move it to a more appropriate section? Or, enforce the "no politics" rule very very strictly within this thread?

That said, just throwing up some tariffs isn't as easy as it sounds.

Trade agreements are structured for just such scenarios. They prevent new folks coming to power and changing the conditions of the agreement. So don't believe what you hear or read; do your research, as I do.

Anyone thinking they can just walk in and willy nilly, throw up a tariff wall, knows nothing about trade law. The trade agreements can be renegotiated, sure, but that is a long and laborious process.

I agree, trade agreement a need to be updated from time to time as conditions change. Overall, though, trade agreements tend to favor the US. Other countries are willing to give up a lot, in order to have access to our markets.

If trade agreements are to be renegotiated, then the question that needs to be asked beforehand, is,"what are the parties involved willing to give up, in order to retain access to US markets."

Also, foregoing the ratification of trade agreements, says that you are unwilling to grant a certain amount of access to your markets. That is fine, but you have to careful, as the markets that are part of the trade agreement will have more access to other markets within the same agreement, but your market will be left out. You will not benefit from the agreement, others will. You have to ask, is bypassing the other markets worth protecting your market.

Again, the pan pacific trade agreement will happen, with or without the US. It was structured to account for US non participation. The agreement also had heavy US favoritism. US companies could sue other counties, without those other countries having the same recourse. Very US biased.

Just throwing my two cents in, Imho, the people of the US seem to think we are the biggest power out there. There is a big risk in "throwing your weight around", you might just find out you're not as big as you thought you were

 

If a post in this topic becomes political, report content rather than respond here.

 

Seems all this will do is increase the prices of small cars in the US. Chrysler proved the price people were willing to pay on the 200 did not justify the cost of building it with US hands. So either make it more expensive by making it here, or make it more expensive by taxing the heck out of it.
It would be fantastic to build more factories in the US and bring production in, but the cost to build the cars here would price them out of the global market, loosing any economy of scale. all development cost would need to be carried by fewer cars, increasing their price.
i believe there are good intentions here, but not thought out thoroughly.

 

Or they could....here's a thought....only build higher margin cars like CUVs. Why does that seem familiar somehow?

 

I hope Ford didn't do this just because of political/public pressure. If they did it for patriotic reasons then great, but to make a move like this just for the next administration which might only be around for 4 years (not saying I wish it is). It's a decision which will have much longer ramifications beyond just the next 4 years.

 

In my humble opinion this is a very delicate and complicated subject. I do think we are all sitting in glass houses though...

 

Someone might have to correct me if I am wrong, but the whole tariff issue deals with lopsidedness between the trade deals themselves. Whereas the deal is, you buy my stuff and I'll buy your stuff. I don't know for sure, I was able to look up and find a 0-20% tariff, meaning it depends on what the product is. Many of these countries we trade with charge upwards of 35-40%, and limit what we can sell them, so the whole idea behind this is equal and free trade, not a one way street. Truthfully, the trade deals in place need both renegotiation and a lot more equality back and forth, which right now is majorly one way, being in, and $700-800 Billion trade coming into the country and nothing going out, well, I remember there being a hissy fit about a decade ago when we were importing $70Billion a year in foreign oil, so yes, it does need to be fixed. This goes a little bit more than labor costs, and it is not just about what the items are, it's about fairness between two countries at a time, but I think I should stop there.

 

Tom Clancy, Trade Reform Act.
Mirror the trade laws of other countries.
If their laws are fair for us selling there, they are fair for them selling here.

 

Should be required reading befofe discussing any sort of trade.

 

U.S.A., but it is better to say its multinational companies, was the biggest sponsor of China to enter in World Trade Organization. And it is easy to verify, just check U.S.A. senate, presidents, ... documents and declarations.
They thought that China was a big potential market (and for multinationals a source to increase revenues manufacturing there, but that was hidden).

World meantime changed, so what looks simple to do is not as simple as it appears.

Don't You like a car imported from Turkey? Uhmm maybe one should know that U.S.A., at least for the last 10 years, has a positive trade balance with Turkey (exports more than imports). They are 3rd (2011-2015) after Saudi Arabia and U.A.E. and before South Korea most important client for U.S.A. weapons and armaments, since 2016 they started to import Liquid Natural Gas and should became the most important hub for natural gas in the area.
If tariffs will go high for their exports maybe they will start to think about buying F-35 jets, or replace their helicopters, ...

 

I am a big believer in, if you wanna do business with us, you have to do business LIKE us. Meaning, you can't save disposal costs by dumping carcinogens and mutagens into the open environment. You have to pay a living wage, safety, you can't operate in a social vacuum, etc.

 

Environmental and safety issues I agree with. "Living wage" is more difficult since cost of living isn't universal. It is easier to do business with counties with similar views. I don't believe there's anything inherently wrong with buying something produced elsewhere (everyone needs jobs), but a more even playing field would benefit everyone at all levels.

 

By living wage, I meant as applicable to the specific region. The hours worked vs wages paid must have a certain equivalency. A correlation. Unfair employment practices.

 

Like, enough to stay healthy...

 

Yes, enough to accomplish a certain minimum of life goals.

I.E, working twelve hours a day for six days a week would not allow such goals to be accomplished, as many societies have discovered.

 

Can't wait to see Marchionne negotiate with Trump - I think Trump will learn a few things about the process, all I'll say

 

You got to watch the business men in China, not beyond physical sabotage to gain control of business sectors. Model railroad industry is an example. Casting dies were destroyed leaving a low profit industry unable to produce new dies. Aristocraft a New Jersey G scale outfit is one example.

 

There are more costs involved than the cost of the car. Unfortunately people don't look at the true costs.
When you buy a car, a TV, whatever, designed and manufactured locally (or at least in your own country) you are supporting your fellow residents with jobs, who spend that money and it has a multiplying effect throughout the economy. When you buy an item that's designed and imported abroad, only importers and sellers make money and there is no longer such a great multiplication effect. You save money in the short run, but without the other jobs, someone might not have money to buy what you make or sell.

Now I know most cars, domestic or imported nameplates, are designed here and there and parts come from here and there so it's not cut and dried. But looking to lower prices by manufacturing out of the county has both benefits and drawbacks. The benefit (of reduced product cost) is easily measured. The drawbacks are much harder to measure and most folks don't care about them.

 

There are more costs involved than the cost of the car. Unfortunately people don't look at the true costs.
When you buy a car, a TV, whatever, designed and manufactured locally (or at least in your own country) you are supporting your fellow residents with jobs, who spend that money and it has a multiplying effect throughout the economy. When you buy an item that's designed and imported abroad, only importers and sellers make money and there is no longer such a great multiplication effect. You save money in the short run, but without the other jobs, someone might not have money to buy what you make or sell.

Now I know most cars, domestic or imported nameplates, are designed here and there and parts come from here and there so it's not cut and dried. But looking to lower prices by manufacturing out of the county has both benefits and drawbacks. The benefit (of reduced product cost) is easily measured. The drawbacks are much harder to measure and most folks don't care about them.

Amen to that Valiant! People don't think about how their purchasing decisions can wreak havoc and it's not just lost jobs. I believe our insatiable appetite for imported stuff is the reason for our crumbling roads, under funded schools and high taxes. The city of Providence is about to go bankrupt and default on their pension obligations. So if you work for the city and are wondering how things got so bad look in your driveway look in your closet.... look in the mirror.

 

We should realize that the only reason the D3 have factories in Can/Mex is because (at various points in history) they had polices that were exactly the title of this thread.

...and that's fine. I expect the respective governments of Can/Mex to concern themselves with the welfare of their citizens. China & Turkey as well.

But what they cannot continue to do is impose tariffs and de-facto tariffs (disguised as Value Added Taxes) that make US products uncompetitive in their protected home markets.

Example... The Jeep Cherokee is about $1500 less than a VW Tiguan in the USA, throughout the trim levels. In Germany, it's $9-12,000 more expensive than the VW. The difference is the application of the VAT on top of the US MSRP. Essentially double-taxation. The Tiguan is rebated the German VAT when shipped to the US, keeping it competitive with the Jeep.

 

We should realize that the only reason the D3 have factories in Can/Mex is because (at various points in history) they had polices that were exactly the title of this thread.

Yup, Canada was very protectionist in autos until the 1960s. We reference it several times at Allpar. That’s why the huge Windsor complex was built and later allowed to contract. For Canadians, there were good and bad pieces. Probably the protectionism worked well and then removing it worked well, too, once Chrysler, GM, and Ford were all well established. It was very wasteful in the end, as the number of cars grew... but they’d have no auto industry at all, I suspect, if not for their start. India had the same thing, they would have just had imported British and Japanese cars with nothing made domestically if not for their laws — but after a while those laws meant that they had inferior and outdated vehicles.

Pragmatism guided by high ideals seems to work well much of the time... “economics as religion” not so much.

 

I would love to see manufacturing jobs come back to the US but there is one small problem with that !!!! When you pay a worker in Mexico say the average or equivalent of $5.50 an hour and the average starting pay for US worker is $15.50 an hour you're already increasing your labor cost. That means you have jack up the price on your product even more to make the same exact product on either side of the border. The United States is not being competitive labor wise... It is the truth no way around it.... Unless we take a serious pay cut and realign our workforces to be more competitive with other countries we will never be the manufacturing leader ever again... It is the god's honest truth

 

We did a big industrial revolution during WW2 that put us ahead of the world. Automation is a great multiplier, one worker can do the job of hundreds of people. In the communication industry it works well, the job numbers have stabelized and look at how transparent communication has become. We could always import the nasty polluting bits like we do now and do final assembly here. There is money in learning how to save the environment. I think we owe the world that.

 

Where did Mr T get all his steel for T towers?Not America,just saying.

 

Because they all moved overseas DAHH

 

First - Deport all the folks that buy or drive a Japanese car.
Second - Scrap all Japanese vehicles.
Third - Convert all the Japanese plants to making GM, Ford and Chrysler products.

Don't agree with me? Leave the US of A.

 

First - Deport all the folks that buy or drive a Japanese car.
Second - Scrap all Japanese vehicles.
Third - Convert all the Japanese plants to making GM, Ford and Chrysler products.

Don't agree with me? Leave the US of A.

My current Japanese car was made in the US My 2 previous cars made by the company that became FCA were made in Canada and Mexico. Of the FCA cars I'm considering in a couple of years to replace my current car 2 are made in Canada, 2 in Mexico, 2 in the US and the other apperantly is to be built in Italy.

I don't have to leave I was born here and so were my parents.

BYW Your comments of making companies do what you or in reality your proxy, the government, reeks highly of socialism.

 

Lets not get to zipped up on Canada.Canadians buy more American made cars [D3] and less imported cars than Americans do.Dave Z remarked on this a few months ago.Canadians are not Mexicans.

 

Actually Canadians buy more American cars because they don't make any of their own cars.

 

have grown up in [removed]/communist systems

sigh.

 

Ok if we all agree that tariffs are bad, and we accept that our Asian trading partners will not play fair you gotta start somewhere.
Japan, defend yourself
Japan for all the transplant factories in the US we have allowed; there should be an equal # of transplant factories in Japan selling whatever they will buy.
Third take the money saved by allowing the Japanese to defend themselves and turn it into business incentive for the D big 3 and other heavy industry. Play by their rules!

 

Ok if we all agree that tariffs are bad, and we accept that our Asian trading partners will not play fair you gotta start somewhere.

I don’t agree that tariffs are always bad. Note the word “always.”

Canada doesn't produce their "own" cars because their population size would never support the volumes required, especially at the turn of the century when the capital expenditures for the D3 were made. But their government wisely made used the carrot and stick to ensure their citizens would benefit.

Canada had high tariffs for many years. They stopped in the 1960s because their auto industry was firmly established and the automakers essentially said they wanted to streamline, not move out. The government did use the carrot and stick but they started with the stick, not the carrot. I don't think Canada's gotten smaller.