On Trump’s Car Tariffs, Companies Are United in Dissent

Auto companies lined up to protest potential tariffs on $351 billion in automobiles and parts at a hearing in Washington on Thursday.

Comments: 84

  1. The fundamental problem is that Trump and his trade/economics team are thoroughly incompetent when it comes to understanding or managing international production structures and trade. Their ideas about the linkages between protection and employment date back to the 19th century or earlier. Life has become a whole lot more complicated since those people were in grade-school because of technological and structural change in these industries - especially for autos, one of the backbone industries of Western economies with massive input-output relationships between companies and countries. Disrupt it, and you disrupt whole national economies all over the world. Current production structures are highly specialized and diversified internationally to achieve massive scale economies, optimized output arrangements, lower prices and higher profits. They were designed around an underlying presumption of free trade. The willy-nilly imposition of tariffs on components of this production structure is akin to unscrambling an omelet. Everything can unravel in ways that none of them have a clue about. So they are flying blind affecting the welfare of millions upon millions of people. The least one can say about these tariff policies is that they are grounded in ignorance and grossly irresponsible. To cast them as a national security matter is obviously deceptive and the dishonest, except to say that wrecking economies with tariffs isn't good for economic survival.

  2. Mr. Smallwood says "He's the President of the United States and I just sell tires. I have to be careful about second guessing him". Why would you feel that way Mr. Smallwood? Apparently you do not get the fact that it IS YOUR JOB to question seemingly unreasonable actions as this one is.

  3. @tommm As President, Trump works for the citizens of the USA. He is not the King or Emperor, tho' he'd like to be. The GOP dominated Congress has abdicated much of their responsibilities to the Executive Branch and refuse to perform oversight. (One wonders if some of them aren't complicit in the Russian meddling, eg. Russian money funneled through the NRA.)

  4. “I have to be careful about second-guessing him, but I wish it were a more logical approach.” If this guy wanted logic he shouldn't have voted for trump. In the world of the stable genius, there's only impulse based on what's best for Trump or his family.

  5. "He's the president of the United States, and I just sell tires, I have to be careful about second-guessing him, but I wish it were a more logical approach." This appears to be a common mistake among Trump supporters. They think the president is acting on behalf of America. He is not, he is acting on behalf of his ego alone. He said the trade war would be easy and that he would win. That's all you need to know. He will win this trade war if he has to bankrupt every company in the chain and throw every worker onto unemployment. It's all about him now, Mr. Smallwood. No matter how rash his decision, he wont back down now. You just sell tires but you have a better understanding of international trade then our president does.

  6. @Rick Gage Sir, Mr Smallwood IS the problem! He just sells tires. He is also totally clueless about the damage Trump will do to his business, the auto industry & the country in general. Perhaps next time he should just stick to selling tires & not vote. A little safer that way

  7. "They think the [occupant] is acting on behalf of America. He is not, he is acting on behalf of his ego alone." And, far more importantly, putin. Don't forget putin. On the other hand, Smallwood just made my future tire purchases easier, by giving me one less wrong-winger's products to consider. Every little bit helps!

  8. I usually side with the union, but here they don’t just get it. It’s no protection raising tariffs. The global economy today has developed just the same as the computer technology - it’s all in the boundless ‘cloud’. What Trump basically wants to do, to use this analogy, is to shut down internet and command everyone to just use the hard drives again. The value chain in the automotive industry is deeply complex, transnational and intertwined - raising tariffs this way is like blindfolded throw a baseball in a China shop (no pun intended).

  9. The union didn’t side with arbitrary tariffs.

  10. What ever happened to a chicken in every pot and a car in every garage? Is Trump trying to bring back walking miles to work? This is making me seriously consider buying my next car soon before tariffs hit. I fully expect a Trump Great Depression or some other economic disaster once the $1.8 trillion added to the deficit to fund taxes for the rich, combined with the overall trade wars. Already a million people have lost their healthcare, and the latest sabotage will mean that preexisting conditions aren't covered and the payments have been stopped. Gilded Age for the rich; back to basics for everyone else (at best).

  11. Mr. Smallwood should read the fable of the scorpion and the frog. Spoiler alert: he turns out to be the frog.

  12. If Mr. Smallwood really believed in protecting America he wouldn't support a traitor like Trump.

  13. Donald Trump's "easily winnable" trade war will hurt the same people that always get hurt: middle and working class citizens who can't afford to wait while the spoiled heir plays My Tariff Is Bigger Than Yours.

  14. who knew that trade is global now?... who knew that economies connect country to country, region to region?... who knew that "helping" one industry might damage another industry?.... who knew ... ok ok... this is no geo-political, socio-economic ground-breaking, Nobel winning, who'd a thunk it moment... most everyone knows.... and those that don't know, are about to learn the hard way...

  15. Who knew world trading alliances could be so complicated?Starting a trade war is easy; winning one maybe not so much. But if you are the one calling the shots in a trade war, there is a whole lot of money to be made playing the markets and short selling, I'll bet.

  16. Greatness. Much Greatness. So Much Greatness!

  17. Prices will go up, workers will get laid off, companies will close down but Trump will NEVER admit that it was his fault. In the alternate facts world of Donald Trump someone else is always to blame.

  18. clearly it was Obama's fault for saving the auto industry in the first place.

  19. "I'm someone who believes in protecting America." But only if it's on someone else's dime.

  20. It's time for Congress to limit the power of any president to impose such sweeping changes in the economy and business without hearings and endorsement by our elected representatives. The imperial presidency must come to an end.

  21. The constitution already has this. Congress alone has power to levy taxes. Trump is bypassing it with a "national security" plot.

  22. @Wilton Traveler I understand and share your disgust with the imperial presidency, but do you really think Congress is preferable? That collection of supine fund-raisers masquerading as leaders? Wishful thinking at best. The proper solution? God only knows.

  23. That’s what happens when you are narrow-minded and vote for what you think are your self-interests: it invariably backfires, because in life everyone and everything is interconnected in one way or another. Not sorry for Mr. Smallwood, even if I agree that the US has lost too many jobs - but the need to overpay top management, and reward investors is as much to blame than as foreign competition; maybe he’ll learn something from the Trump debacle to come

  24. His tax cuts left him no room to manoeuvre. In bankrupting the country, the economic novice knows he has stored up problems. The books will only balance with higher taxes. Call Trump's tariffs a Stealth Tax.

  25. @Third Day. Just like every Republican President

  26. If only the cars companies were named ZTE or Mockbamobile.....

  27. It's funny, nobody had a problem second-guessing Obama's motives.

  28. Unacceptable! When Trump gave them bags loads of cash ( Christmas tax cuts 2017 ) they took it and now refuses to go along with him.. Shame!

  29. Mr. Smallwood, if you think that Trump would do something for you and your family without increasing tenfold his PERSONAL interests, then I think that your vision of reality is a bit out of focus.

  30. We need the "Baby Trump blimp" here on the double, flying in view of the US automotive headquarters, to remind executives and workers of the "Trump Tantrum Tariffs" that are based on a phony assertion of national security and strategically flawed by taking on the whole world at once.

  31. By all means second guess Trump! He doesn't understand economics, apart from doing everything possible to destroy our economy. Protest long and loud until he finally relents!

  32. Will it change the 25% tariff the US has had for 20 years on imported pickup trucks?

  33. He's the president of the United States, and I just sell tires, I have to be careful about second-guessing him I wonder how many times the self described right-winger said that of Obama... the president the right-wing described as a dictator? This statement is tribalism at its worst. Please think objectively... Second-guess the policy... it is genuinely terrible, ineffective and causing pain across the board

  34. @George I second your view. Dear Mr. Smallwood: " you reap what you sow".Try second guessing- you'd actually be correct, this time.

  35. too bad for you, and even worse for the rest of us. not only do we have worry about him trading our democracy away, he is bankrupting our economy at the same time.

  36. Wait a minute. Objectors (even Trump supporters) indicate that these tariffs will be devastating to the car industry. How is this relevant to this hearing? These tariffs are officially contemplated because Canadian car imports for example "threaten American national security" right ? Who cares if American and Canadian industries are destroyed if your national security is at risk, right???

  37. the Republicans have always been against the automobile industry they did not want to save them in the crisis if not for the Democrats Chrysler and GM would be out of business thanks for the Republicans and thanks for the trumpsters

  38. Tariffs on Canadian softwood lumber will increase the average cost, in the U.S., of a single family home by $9000. Builder Magazine, July 2018. No problem, Russia has vast forest reserves, and Putin is our new best friend.

  39. Trump doesn't really have the legal authority for these broad sweeping tariffs. These are not national security matters. Congress should regain their tariff authority and stop Trump. Since most Republicans in Congress have no spines, what they will hear from their constituents who are losing jobs and seeing costs rise around them should be votes of no confidence. In other words, if you care about the economy, vote all Republicans out.

  40. That Richard Smallwood is such a bad person for buying tires from overseas rather than letting American workers make those tires. Trump is going to fix that so that America's workers benefit.

  41. He's doing us a big favor. Carpool. Walk to work. Hitchhike. Get rid of that belly fat. Control your diabetes with exercise. sell that used car you've got hanging around in your driveway. take a nice trip on the money you save from not buying gas and insurance payments. And next time mr. Smallwood vote for somebody other than Trump.

  42. Japan, Thailand, Indonesia, and “some in Buffalo”, Mr. Smallwood? It sounds as though you believe in protecting your profits a lot more then in protecting America, as well you should as an executive of a publicly owned corporation.

  43. Wake up, Mr. Smallwood. You've been had. I know it's one of the hardest things to admit. Hope you figure it out soon. Historically the right wing has ever had your back or acted in your interests. It's their interests--and their interests alone--that motivate their policy. That you may have benfited at times is merely collateral activity for them.

  44. World trade benefits Wall Street and the 1%. Working people have stagnate wages and rising health care. When GM began importing pickups from Mexico did the price go down? How about sneakers from Vietnam? The US has chosen big business especially health care companies and banks as the big winners. We need to manufacturer hear and not listen to all the horror stories sold to us.

  45. Here's hoping Spartanburg, SC loses it all. They are feeling what happens to your fellow man when you vote against your own best interests.

  46. These people (Trump, Ross, and their trade advisors) not only don't know what they're doing, they haven't a clue. So the justification for tariffs on imported cars and car parts may be that "winning" argument about protecting national security. Not too long ago, early in Obama's first term, Republican Senators (McConnell et al), and other free-market" evangalists were more than willing to "flush" GM and Chrysler down the bankrupcy drain. Considering .... "the president said he and his advisers could exact “tremendous retribution” on other countries if the negotiations did not turn out in his favor"...Mr.Smallwood, I'd say you're sitting in the "cross-hairs". Can't feel real good!

  47. What I see here is coercion and extortion, plain and simple. "Hey Mr. Businessman, you have a nice little thing going here. Making great money every year so I want my "taste" if you know what I mean. It would be a shame if something happened to that business - like tariffs. Just talk to my boys and we'll work something out." Tony Soprano would be proud.

  48. I feel no sympathy for the auto workers - especially in MIchigan. After the Democrats prevented the US auto industry from going under, their reward was people voting for trump. Enjoy what you voted for - I will never again buy another car made by a US car company.

  49. I’m not understanding your logic. Trumped squeaked out a win in Michigan, but won by a landslide in states that make foreign nameplates. So you conclude, rather than addressing real and fixable issues for working class allies, I’m going to buy cars from areas that fully supported Trump. Brilliant!

  50. @APO So you will instead buy foreign nameplates, built in states where Trump won by a landslide. Brilliant strategy. Let me guess you don't use a bank anymore either? We are truly living in the time of temper tantrum politics.

  51. "In remarks before the hearing Thursday, Commerce Secretary Wilbur Ross said that the investigation would be fair and that its results were not predetermined." That Ross bothered to say those things telegraphs that they're not true -- both because he SAID them, and because HE said them.

  52. I guess I shouldn't but I hope every person who works or owns a business that voted for Trump has their job or business burnt to the ground by these tariffs. Trump is doing enough damage to the rest of us that I really can't generate even a tiny bit of sympathy for his voters.

  53. Prices of ALL new cars will go up. Even if there was a car with 100% domestic content that wouldn't be affected by the tariffs do you think that when they see their competition's prices having to go up that they won't raise theirs as well to take advantage of that rather "leaving money on the table" and using the price difference as a marketing advantage? And the other thing that people are overlooking is the twisted logic that is allowing Trump to unilaterally assert tariffs when the constitution provides only Congress that power.

  54. Do you mean to say that people who run the big automotive companies know more about their business than Trump?

  55. Talk about Big Government Republicans. This is Big Government telling you what you buy by making it much more costly. This is Big Government taking value from those who own foreign cars whose market value will drop on the used market as their repair and maintenance costs are capriciously raised. Increasing the costs for parts to repair and maintain the cars of those who already bought their cars will be changing rules after the fact. Unlike those buying new cars who are making an informed decision.

  56. It is my sense that if you increase the price of a new car that same model's older versions will better retain their resale value. Parts for it may become more expensive as you suggest.

  57. It is just astonishing how these people continue to support Mr. Trump even when it's not in their best interest.

  58. All I can say is that votes have consequences and in this case, they can bring trauma to people around the world.

  59. Looks like the Republican tax cuts to corporations will be used for offsetting the costs of new tariffs and the extra costs to revise supply chains as opposed to creating more jobs. And Trump calls that making America great again? More like bait and switch sales tactics.

  60. People like Smallwood is incapable of putting himself in other people's shoes until his own shoes are about to be taken away

  61. Mr. Smallwood, have you considered inventing a tire made from soy beans? The farmers are going to need something to do with those crops they'll no longer be exporting. It'll be a win-win for the US and you can continue to justify your support for Trump.

  62. The question no one seems to be asking is what constitutional authority does Trump have to unilaterally impose tariffs (quite apart from violating WTO rules). The national security issue is a joke. Toys are more vital to national security, and play a bigger role in the US trade deficit with China: https://silverberg-on-meltdown-economics.blogspot.com/2018/06/trump-trad...

  63. Do you know how other countries desperately wish they could have the jobs in our giant tech companies that have replaced manufacturing ?

  64. Immensely troubling that the DOC should set hearings but then, when it becomes apparent the evidence will be what the President does not want to hear, cut the time in half. Government by preordained gut feeling is as bad in its refusal to listen as government by dogma, and perhaps even more dangerous in its unpredictability and failure to consider consequences. This is so even were it remotely defensible to consider passenger cars, or Canada, national interest concerns. When governmental agencies also adopt an attitude of refusal to listen, in the world's most promising Republic, we know that there is considerable rebuilding to do.

  65. So, Mr. Richard Smallwood is a longtime Trump supporter who is dismayed by the tariffs that are threatening his livelihood. Which part of Trump's campaign speeches promising to impose tariffs and taxes on foreign goods did he misunderstand?

  66. Remember Mr. Smallwood the President of the United States works for you. Yes, while politicians and some government employees want you to believe that they are superior to the people they in fact are our employees, and while Trump may be the highest among them he is still one step below us. Citizen. We've hired him and the rest to take care of things so we may pursue life, liberty, and happiness.

  67. At the beginning of Trump's administration, there were the Strategy & Policy Forum and the Manufacturing Council, comprised of many of the top corporate leaders in America. These councils would have presumably steered Trump and the administration away from its current trade policy. However, those councils were disbanded because of Trump's reprehensible behavior in response to the Charlottesville incident. "Presumably" is the operative word. Trump, no doubt, would have rejected the advice of these business leaders as "elitist" or "globalist" and relied on his gut instincts which are based essentially on a sense of personal grievance.

  68. How many more times does the nation need to be hammered by policy change, only to hope the White House is listening to the implications and fallout of those decrees? President Trump runs the entire administration by his decisions and decrees. Once heard, every individual, business, and corporation needs to formulate Plan-A, Plan-B, Plan-C, to adjust to policy change, because this is the autocracy we're stuck with for awhile, and the titular head of the nation isn't listening to others' counsel, reason or suggestion in making the Administration's policies. Mr. Trump has repeatedly said his decision on everything will prevail. He's the Expert-in-Chief who follows his gut and experience. He recently reminded us he has spent his entire life preparing to make these decisions. Industrial folks would do well to overlook Donald Trump's own business bankruptcies: six of them. Not one of them was his fault. If any Trump policy falters, keep in mind (as he will) that flawed implementation of his policy is the only cause and explanation for failure of that policy.

  69. I'm not a trumpista, but isn't the whole point of the tariffs to raise Mr. Smallwood's costs? For years Mr. Smallwood's imported tires have been undercutting tires made in this country, ruining businesses and killing jobs. Of course he opposes the plan. And of course all the big brand name corporations do as well, since they're are all basically just importers now, with even the products they assemble here being largely made from imported parts. Mr. Smallwood and his type have been selling us down the river for years. Even if the payback doesn't stick this time, it has to come some day.

  70. Trumps obsession with German cara is ridiculous. VW tries to compete in the US mass market and has failed. Fiat has failed and will probably pull out of the US market. Jaguar,Land Rover, Audi, BMW and Mercedes sell small numbers of over priced cars which appeal to Europhiles who wouldn’t be caught driving an American car to save their lives. They aren’t going to drive a Caddy or a Lincoln. But they will drive a Tesla whose model S now is the top selling luxury car in the large sedan segment outselling the S class and 7 series. The lesson here is that American companies can compete with German car companies if we give rich consumers a compelling alternative.

  71. Trump's tariffs- all of them- are but a piece in a larger strategy that I'm quite sure the Donald himself does not fully understand... They go hand-in-hand with the demonization of immigrants and the shredding of the safety-net through the constant chipping away at Obama-care, wealth redistribution up to the top echelons of earners, and the disruption of the stability of the post-war world. It is the strategy of fear- one which cynically rewards the very politicians causing it, as they tout themselves and their party as the one who will 'protect' the voters that they have so skilfully and cynically undermined and deceived. Add a 24/7 layer of amplification through talk-radio and tv 'news', and you have masses of people who are true believers in the very people who are most responsible for their plight. Sadly- this is the go-to strategy for 'strong-men' and would-be kleptocrats around the world. FDR had it right. It is past time to wake-up to this reality- no matter how scary that prospect may be.

  72. Economic collapse gave us FDR. There weren't many second-guessers then. GOP and Hoover and Oligarchs, didn't end well and neither will this replay.

  73. NAFTA was suicide for the U.S. auto industry. We immediately lost 30% of automotive jobs to Mexico. Nice for middle America! This then opened the door for seeking the world’s cheapest labor. Thus China came into play. Chew on this statistic: before NAFTA GM employed 0 Chinese. Today GM employs more Chinese than Americans and Mexicans combined. GM has no right to call themselves an American company in my opinion. If we let this continue soon there will be no Americans employed in the auto industry! So tariffs will hurt the international auto industry and Americans will pay more for cars. In return we might stop the drain of automotive jobs out of America. Too little too late, but better than let the industry gradually completely leave this country. The automotive companies didn’t care about U.S. citizens and crushed the auto industry in America. Let them cry “unfair” all they want. Bring on the tariffs.

  74. To the "puzzled and dismayed" Richard Smallwood, president of a tire company: A great businessman -- a Henry Ford, a Bill Gates, a Jeff Bezos -provides goods or services the public can use, or finds a better way to produce them. A great businessman does not mismanage his company into bankruptcy. Donald Trump, with his multiple bankruptcies, is not a great businessman. He has produced nothing new, and has created no efficiencies. He has slapped his name on stuff that other people have produced. He has a lot of money, yes, but he acquired it first by receiving it through his family -- not by creating it -- and then by devoting himself to cheating his creditors. He has not made any better mousetrap. He is simply more shameless than anybody else. He is actually proud of the ways he has found to not repay money he has "borrowed" and otherwise getting out of his contractual obligations. He does not know enough to be ashamed of his conduct. He is at best a skilled crook, not a great businessman. Has your tire company ever been bankrupt, Mr. Smallwood? Do you deliberately welch on your debts whenever you can get away with doing so? This article doesn't say, but my guess is that you don't. Most business people, even if they are not a Jeff Bezos or a Henry Ford, produce usable goods and services without cheating people. Give yourself more credit. Give crooks like Trump less.

  75. The way thing are going I think anybody involved in the Auto sector is going to see the underside of a bus. And it gets better- the driver is so hard hearing he will not hear your screams. He will tell the police he not responsible as the person before him damaged the brakes.

  76. The American auto workers voted overwhelmingly for Trump and now complain at the result. Trump - as insane, moronic and dangerous as his plans often are - is doing exactly what he said. Obama saved their jobs and they then turn around and vote Trump. They deserve absolutely everything the mainstream experts predict will come their way under Trump. No health care, massively increased national debt, and a world in the process of developing a new economic system that increasingly excludes America.

  77. Opportunity costs are real costs. Money we don't take in because of one policy is money that could have been spent addressing the concern of another policy. Vicious circle, self-licking icecream cone; what is the intent behind the policy, and does it justify the costs?

  78. Isn't this what's known as "a bull in the china shop"? A man without a plan. The law of unintended consequences, etc.

  79. As if we needed any more examples, here's yet another case in which Trump and his enablers are deeply into their strange ideology and increasingly divorced from ordinary reality. Do ANY of these people live in the same real world as the rest of us, or are they all coddled by the Heritage Foundation, the Mercers, the Koch organizations, etc.

  80. Trump's thoughts on just about, well, everything, were formed in the 1970s or 80's, and they're as simplistic as the prototypical "man on the street." Europe has a 10% tariff and ws have a 2.5%. That's not fair. We have to change that. He does not begin to take into effect the globalization of the industry, and the unintended effects his solution would bring. That's what you get electing a simpleton, and a stubborn and autocratic one, for president. GOP, take note...as if they would!

  81. Mr. Smallwood, as a citizen of the United States it is always your job to evaluate, and to question, any decision that an elected official makes on your behalf. You appear to have a position of some responsibility and the credentials to go with it. Please use them to preserve our country. Blind citizenship is no citizenship.

  82. Testifying before Congress is great, but if you want to reach President Trump then the industry needs spokespersons on T.V., especially FOX.

  83. Sort of interesting how authoritarian types get a lot of respect from the people they seem to hurt the most. Is Trump really going to deliver on salvation for His believers? For the rest of us heathens, is starting a trade war is the right way for he US to negotiate better trade deals? I’m not seeing the historical precedent.

  84. Mr. Smallwood. You are not small as you might think you name implies, You have a going business, obviously built from a keen business sense housed in a thinking brain. The man who you are afraid of second-guessing simply because he is president, is a demonstrated business failure. I would take your second, third and tenth guesses way before I would consider his first. Go at it.