r/WallStreetbetsELITE • u/stresskillingme • 10d ago

MEME How much will Trump's 25% tariffs cost the U.S. automotive sector?

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u/CasualBeer 9d ago

Honest question: I know it's not r/economy, but how do you think this will develop long-term? (like in 10-15 years perspective) Not here to validate what Trump is doing, but I wonder if there is at least a chance of something positive for US economy comming out of that. Btw. I'm not from US

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u/MuddVader 9d ago

From my basic uninformed understanding, there has been a movement for a while to bring some aspects of manufacturing to/back to the US for years now, like the CHIPS ACT, but the primary problem is this regime's intent on violently pivoting.. Well... Everything.

I would assume that building all of the infrastructure to replace all of what was once imported would take years, and at that point, we SHOULD have an actual President again, which might discourage some of the players from shifting to ALL US products and instead just try to ride the storm through the night and hope for a brighter tomorrow.

Imagine spending 100's of millions/billions to relocate your facilities, and then it's suddenly massively cheaper to operate overseas again. These companies would have to have a lot of faith that this country is going to STAY under the command of the Republican party for the foreseeable future, and that's far from certain.

Idunno.

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u/CasualBeer 9d ago

I have very similar conclusions - I can't mentally grasp what this strategy is all about. Even with the relocation of part of the industry, production costs are disproportionately higher than 25%, 50% or probably even 75% tariffs. In my field of operation I have the opportunity to compare the prices of services of several European countries. Despite the fact that wages in these countries (labor costs), for example, are 1:1.5 (ratio), service prices can vary very dramatically, e.g. 1:4 sometimes more. Everything consists of a myriad of factors, such as the price of land, rent, raw materials, chains of suppliers whose margin multiplies the actual cost. Except for critical industries like the semiconductors you mentioned, this tariff war seems to defy logic, even long term....