The Wheels Come Off

Trump just announced a 25 percent tariff on all imported cars beginning this coming Wednesday.

Well, there goes my hope of buying an Audi this year! 

Now, I kid, as I am not in the market for an Audi, but that is going to make motor vehicles - already too expensive because of the trend toward large SUVs and all of the unnecessary technology the automakers are putting into motor vehicles, be it due to customer demand or government regulations -almost completely out of reach for the average consumer.

So that Volkswagen Golf GTI you've been looking at, already overpriced at $32,445, will set you back about 40 grand instead!  And I don't even want to think of how much a Golf R will cost.

Oh yeah, for the record, a base Volkswagen Golf costs the U.S. equivalent of $26,291 and would cost about the same with Trump's tariff as a Golf GTI without the tariff . . . if you could buy one in These States.

Trump appears to be counting on American consumers opting more for American-made motor vehicles, including those made at factories of foreign companies such as Volkswagen (great, more Altases on the road!), Toyota, Honda, and Hyundai . . . but with GM, Ford, and the Stellantis brand group that used to be called Chrysler reaping the most benefits.  So what if the Big Three own plants in Canada and have domestic-branded vehicles brought over from north of the 49th parallel - long considered domestic vehicles - and these tariffs will make their Canadian-made vehicles more expensive as well?  But they will reap the benefits of the tariffs  - they'll pass the cost onto the consumer.

That's assuming anyone can afford Detroit's wares.  A Pennsylvania Chrysler Group dealership in the Philadelphia suburb of Glen Mills told a TV reporter that a Ram pickup (not a Ford Ram pickup, as Michael Cohen has called it - Ford makes the F-150), which normally would go for $80,000, will go for roughly $100,000 under Trump's tariff.  A lot of people are trying to fathom the ludicrousness of offering a pickup truck for sale at $100,000.  I'm trying to imagine why anyone would pay even 80 grand for a pickup truck.  Hello?  It's a pickup truck!  It's meant to carry bales of hay and half a ton of loose topsoil!  What's up with the leather seating and walnut accents in that damn interior?

I'm also trying to imagine why anyone would want to buy a Tesla Cybertruck.

Trump's tariff will not only make new motor vehicles impossible for the people who voted for him to buy, it may make it very difficult for some foreign automakers to survive in the U.S. market and maybe even some domestic automakers to survive period.  Trump is trying to force the cost of the tariff onto the automakers by not increasing manufacturer's suggested retail prices (MSRPs),c which would cripple their ability to make a profit from sales.  The tariff may even have the unintended consequence of putting Tesla out of business.

This is just a hunch . . . but the 2025 New York Auto Show, which opens in a few weeks, may be the last New York auto show I ever go to.

Running Off the Road

Good news - Trump is backing away from imposing tariffs on foreign cars, giving trade negotiations between the United States and the European Union and Japan six months to produce an agreement.  

But get this: Trump is also ready to impose the tariffs at a moment's notice, and he and Commerce Secretary Wilbur Ross have decided that certain imported cars and car parts "threaten to impair the national security of the United States," because Detroit contributes technological advances to military contractors, and thus imports are a threat to U.S. expenditures on research and development involving national security.

So my Volkswagen is a threat to the security of the Republic.  Who'da thought?

Wonderful.  If Trump's tariffs should go through, Americans will be paying 25 percent more for imported automobiles and may be forced to consider buying American - which means buying SUVs or crossovers because Detroit can't be bothered to make much of anything else these days.  The idea of cars from other countries being threats to national security is ludicrous, given America's military superiority on this planet (and it's nice to see we're still superior at something) and given the lack thereof in American automotive engineering.  Left unmentioned is that the tariff on foreign cars and foreign auto parts would have adverse effects on the European and Asian automakers who make cars in the United States - and most of their American factories are located in the Republican South.

As a VW enthusiast, I'm worried, you'd better believe I am.  Tariffs might be the deciding factor in Volkswagen of America's decision on whether or not to kill the standard Golf in America - heck, it may even kill the more expensive GTI and Golf R as well! - and it might limit VW's plans to make and sell electric cars here.  Other brands would undoubtedly be affected, as would at least one Detroit automaker - the Chrysler Group, which is now a collection of American brands owned by a multinational company based in Italy (Fiat Chrysler Automobiles).  Trump's tariffs, if enacted, would wreck untold havoc on the U.S. auto market.

The bright side?  A lot of voters own foreign cars and would never even consider buying a domestic model - and some of them are Republicans.  Congressional Republicans may actually break with Trump on this one.

Republican Senator Pat Toomey of Pennsylvania, by the way, said it best: "I would be very surprised and extremely disappointed if we decided that Volkswagens are a threat to America's national security and we imposed a tax on American consumers in that category."