The Reality Of Trump, Automobiles And Mexico - Kittens Driving Cars Edition.

Given the frenzy right now, you couldn’t be blamed if you think Donald Trump has just been elected Supreme Emperor Of The World, and given some of the automotive press reaction to plans of “The Donald” to do with the industry, I think it’s time that someone injected a little rational th

11 Nov 2016

The Reality Of Trump, Automobiles And Mexico - Kittens Driving Cars Edition.

Unfortunately all the rational people I know are currently looking for new homes in Canada right now, so I’ll have a go instead.

I’m also aware this isn’t the most exciting subject in the world and “Oh My God He’s Going To Destroy Everything” makes for more captivating reading, so I’ll do my best to stop you hitting the back button by using pictures of kittens driving cars to break things up.

There are two things being being talked about: A 35% tax on cars built by U.S companies in Mexico then imported into the U.S (great piece here on Jalopnik) and reversing all U.S emissions legislation for cars ( great piece here on CarThrottle).

I’m still looking into and researching the emissions and EPA side of things, so for now let’s look at the reality of the idea he can tax cars being imported from Mexico by 35%, thus increasing the prices of small cars by around $5000 per unit.

“Absolutely illegal,” - Robert E. Scott, director of trade and manufacturing research at the Economic Policy Institute and a strong critic of past trade agreements like NAFTA when asked about Trump’s import taxes.

Basically, to impose the tariff he would have to terminate NAFTA (the North American Trade Agreement) which trade experts from across the political spectrum warn that most of his threatened tariffs would violate decades of binding trade deals negotiated by previous administrations and agreed to by previous Congresses.

Put simply, there is no obvious mechanism in international law to compel Mexico to pay for a border fence let alone impose new tariffs on cars.

If that isn’t enough to quell fears, Trump isn’t just talking about tariffs in relation to his weird and ignorant obsession with Ford making small cars in Mexico, he’s talking about also raising tariffs for other countries including China. This is in step with old school partisan politics from the early 19th and 20th century when Republicans championed high tariffs to protect businesses from competition. It was a fundamental split in the parties until after World War 2 when the U.S. led international talks to lower tariffs around the world that had been widely blamed for worsening the Great Depression.

So, on top of the legal issues is the fact the Republican party as a whole isn’t that big a fan of Trump.

As of this election the Republicans also hold both the house and the senate so they have will control over national legislation. The Republican party platform itself runs heavily on the idea of freeing up businesses from taxes, oversight and regulation and will seek to control things that will damage their interests.

If Trump refused to back down, other world leaders would then be free to raise their own tariffs in retaliation and setting the stage for a trade war that could strain foreign relations and depress American exports.

Putting it mildly, that’s something that would damage the Republican party irrevocably and give every reason for them to stop it from happening.

#blogpost

For more reading on tariffs effecting the auto industry, see also: Has the Chicken Tax Come Home to Roost?

Comments

Matt Robinson Ten Tenths Podcast gary Alex Kersten

Very nice job, was about to write a similar article. Also, thanks for sharing my post!

Gotta love the fat cats of the world…why build it here? Its so cheap to build it over there! Makes me wanna f×ckin puke.

It’s the reality of business, and the reason Ford are moving production of small cars over there is so they can can keep the cost down of economy cars and build the higher profit cars in the factories in Detroit currently making them.

Trump kept banging on about Ford firing Americans and sending their jobs to Mexico when they were doing no such thing… they just didn’t want to announce the new Bronco and Ranger which will be built in those factories by those and more workers.

Yeah. Why does globalism have to trump protectionism. I think its about time our politicians started standing up for their own citizens first, not everyone else.

Came for the kittens, found out article is good.

Strong in the clickbait I am, words to back it up I have.

Thanks for saying that.

Great article! But looking at Trump’s recent behavior, he is showing signs of wising up. It’s also important to remember that a President rarely fulfills everything said during their campaign. With Trump’s recent recognition of Obama’s expertise (says he wants to see him again many times in the future), I’m hoping that we will see a positive relationship between the Republican and Democratic parties if everything works out right. It seems Trump hit the realization of the burden as presidency as much as the burden of an engineering hit a high school graduate. If it works out, it should be a good result :)

I’ve got $100 on Trump having a mental breakdown within six months and either leaving or being kicked or being kicked out of office on health grounds.

Bottom line: Trump was elected because people are fed up with the current administration and Trump will shake things up, he’s a great businessman and really knows how to spend money the smart way. Case in point: he spent about half of what Clinton spent on campaigning, and instead knew how to be controversial enough to get free advertising from the media. In addition to all that, just watch the way he runs rings around Clinton in debates and how creative he’s been in business the last several years. Sure, he’s a jerk and thinks far too highly of himself, but that’s nothing compared to what Hilary has done behind closed doors.

And I know this site is primarily UK-based and so most people on here only know about our country through the media and let me just say this- the media was against Trump, and they weren’t shy about it. Probably 90% of what you see about Trump is from an openly biased news outlet that wanted to paint a bad picture of Trump to get their friend Hilary in office. Hate Trump all you want, but his victory proved that it’s a new era here in the US of people thinking for themselves and not just voting for who the media tells them to vote for. In closing- yes, Trump acts like a jerk. He plays that character well, but he did it to gain popularity and media attention, no one should down him until they go look up all of his real ideas for office, and then go look at Hilary’s plans.

“Runs around Clinton in debates”… you must have watched different debates to me. The man couldn’t string a thought or a complete sentence together.

He’s such a great businessman he refuses to release his taxes because he’s nowhere near as rich as he makes out to be. He has

As my wife put it:

“This guy cheated on his taxes, bragged about sexually assaulting women, is on camera sexually assaulting a woman, has cheated on all of his wives, thinks women should be punished for having an abortion, has filed bankruptcy several times, has enlisted the services of small businesses and then didn’t pay them, has claimed that our voting system is rigged when studies have shown that not to be even close to the truth, believes that 98% of scientists are in on a conspiracy with China to create a global warming hoax, has incited violence against peaceful protesters, has suggested that the NRA could “take care” of his opponent, is a raging Narcissist, vows revenge on anyone who has ever opposed him, thinks our allies should pay us to protect them, thinks Japan and Saudi Arabia should have nuclear weapons, doesn’t understand why we don’t nuke our enemies, thinks he knows more about ISIS than the generals do, has said that he will be his own advisor because he has the best ideas…”

Don’t get me wrong, between Clinton and Trump America was served up a choice of a turd sandwich or a bottle of warm piss, but the idea he is a good choice really beggars belief.

The lack of tariffs is what killed the Australian car industry and is slowly killing off every other industry we have including farming. A tariff is what keeps local businesses (and therefore jobs) alive

Except it isn’t. Several studies have shown that a free trade agreement benefits both countries who sign it. Or just look at germany. We have some of the highest salary costs in the whole EU and still we export tons of stuff and our economy is very well off. So if an economy needs tariffs to stay alive, that’s because it isn’t competitive. The lost revenue would be an incentive to make your products better and production more efficient, but if the government protects thecompany with taruffs, there’s no such need. Which means that ten years later your economy will be so outdated and unproductive that they’re doomed to fail with or without tariffs.

Very nice written article. Lovin the kitten idea too.

Thanks man.

Nice article, finally someone making sense out of things.
Also, those cat pictures were not bad.

Thank you.

Trump is a billioner businessman. He didn’t made that fortune from nothing .For doing this he knows something more than you ordinary people.

If you believe any of that, you’re and ignorant fool.

He doesn’t even understand the constitution.

First of all, we don’t know his wealth because he refuses to give any information other than “it is a lot“.
secondly, he started with one million dollar. Are you aware that wealth grows exponentially? if he makes a billion dollar out of one million, that’s the same as starting with hundred bucks and maling hundred thousand. most people start with nothing and build a house worth a few hundred thousand during their lifetime, so they’re more succesful than trump. Other than that, he didn’t pay some small businesses that did contract work for him, and he scammed poor people with his fake university, so I wouldn’t exactly call him an honest businessman.

He lost 900 milliom in one year m8

Well written post and only scratching the surface of why this is a pretty terrible idea. Luckily, as you mentioned, it would still have to pass through Congress, and that’s simply not going to happen the way he wants.