Ford's CEO does not agree with Trump's tariff policies, because he believes it is going to have a huge affect on the U.S. economy, which will not be for the better. Rebecca Linland is a senior analyst for Kelly Blue Book, and she believes putting a 35% tariff on Mexican made vehicles will wreck havoc, because it is going to be very costly to both consumers and businesses. Ford's CEO said they are going to engage with Trump and his administration positively, to help ensure the right policies are implemented, so the United States can grow.
This article was an interesting read, as I did not know how much Trumps tariff policies could affect the automobile industry. If Trump does implement a 35% tariff and costs increase significantly for both consumers and businesses, I believe we could see the unemployment rate increase in this industry, as well as see a couple automobile companies go out of business completely. It will be interesting to see what the future hold for the automobile industry.
Link: http://www.msn.com/en-us/money/companies/ford-ceo-warns-of-huge-impact-from-trumps-proposed-tariff/ar-AAkkCBc?li=BBnbfcN
If the tariff on Mexico goes into effect, their GDP could decrease because there are fewer final goods being produced. This could also lead to fewer jobs in Mexico if automobile companies begin producing elsewhere.
ReplyDeleteI don't know the percentage of how likely Trump's enforcement of this tariff is but I think Trump will need to delineate from the perspective of being a business man and being a president.
ReplyDeleteAutomakers can make a healthy profit building the larger, more expensive vehicles at U.S. plants, even with higher labor costs. For smaller, less expensive cars, they'll lose money if they don't keep costs as low as possible. Experts doubt that a steep tariff will bring small car production back to the U.S., as Trump claims. They say building small cars here just wouldn't make financial sense in most cases, given the falling demand driven by factors such as relatively cheap gasoline.
ReplyDeleteThis article is really interesting since it relates to the tariffs that Trump is implementing on imported Chinese goods. This could negatively affect local consumers in America and producers in the exporting country. The 35% tariff on Mexican vehicles would encourage American consumers to buy locally owned vehicles, and increase the trade surplus, but it would harm automobile companies in Mexico, who would have to limit their production, along with decreasing revenues.
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