Ford pulls guidance, warns it will take $1.5 billion hit from Trump's tariffs (1 Viewer)

[cpwill]

I knew you were trying to go to the MW

Because I made it pretty obvious that I was?

:raises eyebrow:

We are talking about Ford taking a charge due to tariffs, which impact variable costs.

Indeed. Tariffs drive up costs, which drive up prices, which result in decreased demand, which results in lost economic activity. Ford's recent announcement is an excellent example of that.

Ford doesn't have a business model where it's labor costs sit at the floor.

Which is of course irrelevant since the point being brought up was a general one, rather than one that was contained only within Ford.

What is going on with respect to the topic of this thread has to do with the POTUS raising taxes on Americans, and how that negatively impacts companies that are sensitive to trade.

Indeed - and specifically, we have one side that attempted to blame the companies for the obvious and predictable results of that policy that increases costs.

Just like, in the MW debate, we have another side that attempts to blame the companies for the obvious and predictable results of that policy that increases costs.

We've been through this already.

As far as I can recall we haven't, and instead are discussing it now.

Well. I'm discussing it. You are attempting to shift to an implied claim that the difference between a variable and a semi-variable cost somehow means that the basic dynamic of Higher Costs -> Higher Prices -> Reduced Demand -> Loss of Economic Activity doesn't count...

We are, as a species, generally unwilling to accept that our policy preferences can come with unintended consequences, and that leads (here, and elsewhere) to a lot of scrambling.

Your analogy was agenda driven. Raising minimum wages isn't the same thing as enacting broad tariffs. Not even close.

Yes, yes. iTs diFFrUNt wHeN mY tEAm dUS iT!, etc., so on, and so forth.

 

[Gimmesometruth]

that our policy preferences can come with unintended consequences

We know that MW has some effects, its just that FOR YEARS your claims HAVE BEEN horribly wrong, they don't have much effect on employment levels and their impact on pricing is minimal.....whereas.....the tariffs will more than likely have ALL SORTS OF UNINTENDED PRICE EFFECTS, FAR ABOVE MINIMUM WAGE EFFECTS.

 

[Kushinator]

Indeed. Tariffs drive up costs, which drive up prices, which result in decreased demand, which results in lost economic activity. Ford's recent announcement is an excellent example of that.

First of all, tariffs are a tax on imports.

Secondly, raising prices does not reduce demand. It reduces quantity demand... you might think of it as a nuance but nevertheless. Reduction in the quantity demanded at a higher price doesn't necessarily reduce revenue (quantity sold × price). What it can impact is future investment.

What makes your comparison so strange is that minimum wage increases are scheduled, thereby eliminating uncertainty with respect to rise in the wage floor. What Trump's doing is downright bonkers! The level of uncertainty and distrust he's invoked throughout the world is really unprecedented. How can you plan a 20 year investment like a new manufacturing facility given our current political clown show?

Furthermore, additional economic constraint will emerge as goods markets experience shortages, which will drive prices higher. Remember your fantasies about stagflation? I do!

no- as i said, stagflation is real.

Trump's economic policy is a direct cause for our trading partners to be dumping dollars (lower trade deficit), which can be evident in the way both interest rates have been increasing as the value of the dollar declines. Maybe he will shift on a dime and call the whole thing off... or not.

What have you learned about stagflation since you made the post above?

Which is of course irrelevant since the point being brought up was a general one, rather than one that was contained only within Ford.

Which is a useless point. It is just a way to deflect.

Indeed - and specifically, we have one side that attempted to blame the companies for the obvious and predictable results of that policy that increases costs.

Who did this? Please provide citation.

Just like, in the MW debate, we have another side that attempts to blame the companies for the obvious and predictable results of that policy that increases costs.

Same as above. Please provide citation. We do know that businesses fail all the time.

You know what else we know? Increases in the wage floor didn't lead to the predicted doom and gloom. To quite the contrary.

As far as I can recall we haven't, and instead are discussing it now.

The minimum wage increases are going to spell doom for the economy argument was abandoned years ago, and was AFAIK cemented to the ocean floor after COVID.

You are attempting to shift to an implied claim that the difference between a variable and a semi-variable cost somehow means that the basic dynamic of Higher Costs -> Higher Prices -> Reduced Demand -> Loss of Economic Activity doesn't count.

I've addressed your simplistic take above. Raising the minimum wage didn't induce a cost-push style inflationary event. Shortages from the pandemic did! And shortages from a trade war are sure to cause a spike in inflation.

Yes, yes. iTs diFFrUNt wHeN mY tEAm dUS iT!, etc., so on, and so forth.

A tariff is taxing economic activity. We want to trade with other nations. We don't want prevalent low wage employment.

Next we'll be hearing about how high minimum wages encourage illegal immigration.

 

[Absentglare]

Yeah, but they want to equate a tariff to a rise in minimum wages. Why? Given the cluster **** of these past 100+ days, the both sides narrative is ready to play a few downs.

Trump very likely wants these baseline 10% tariffs to remain in place to function as a sales tax, as a federal tax that burdens normal folks the most and billionaires the least. It hurts us lower class folks. Raising the minimum wage helps us lower class folks.

It’s generally bad when prices go up without wages going up. It’s often okay when prices and wages go up.

 

[Absentglare]

Hello, @Absentglare!

So, the fun thing about this place is that it has a search function, and you can bother to check before you mischaracterize people's positions.

I am not defending Tariffs. In this section you are citing, I am instead pointing out that people in this debate all switch sides once the policy shifts from making material more expensive to making labor more expensive, and this is because people are generally tribalists whose main consistency is in reaching for whatever argument is most immediately politically convenient, vice consistent.

Whether you would characterize it as a defense or not, it functions as a support of tariffs by pretending that the left supports the same thing.

Of course, they are wildly different things. For example, republicans campaign on cutting taxes, and then they raise our taxes, so they lied. Also, raising taxes is not the same as raising the minimum wage simply because they both push prices up, because the price increase goes to the government in the former case and to our pockets in the latter.

 

[SoCal]

"The tariffs are expected to add $2.5 billion in costs overall for the year, mainly related to expenses from importing vehicles from Mexico and China, Ford executives said."

Wait. I thought the consumer was going to pay the cost of the tariff. Now Ford say's they'll end up paying. How many sides of the mouth can you talk out of?

You think Ford is going to reduce the salaries and bonuses their top executives 'earn'? No, Ford is going to pass these new costs onto consumers by raising the prices of their products. It's a golden rule of our capitalist system. Jeez, this is economics 101...

 

[cpwill]

First of all, tariffs are a tax on imports.

Correct! Also, Tariffs are spelled with a "T", and other points that are true, but also irrelevant to the point being made.

Secondly, raising prices does not reduce demand. It reduces quantity demand... you might think of it as a nuance but nevertheless. Reduction in the quantity demanded at a higher price doesn't necessarily reduce revenue (quantity sold × price). What it can impact is future investment.

:lol: okedoke. Are you really trying to inject industry terms that do not change the actual dynamics under discussion in an attempt to obfuscate?

What makes your comparison so strange is that minimum wage increases are scheduled, thereby eliminating uncertainty with respect to rise in the wage floor.

Oh neat. And no tariffs are ever scheduled because they only ever - ever, ever - get put in place in a chaotic and utterly unplanned manner seemingly designed to maximize chaos and media attention, even at the cost of massive uncertainty and loss in the actual market?

What Trump's doing is downright bonkers!

Ah. So no.

Hey, out of curiosity, do tariffs only increase the costs of importing goods when they are being put in place in a chaotic and unplanned way?

Like, for example, if we just decided to maintain a 10% baseline globally from now on, and I was trying to import a batch of T-Shirts in 2028, could I just go to the Customs official and say "Hey, so, b-dubs, I know it says that I have to pay you 10%, but, this has actually been pretty stable now, so, in fact, I don't, and therefore this won't increase my costs."?

The level of uncertainty and distrust he's invoked throughout the world is really unprecedented.

Solidly concur, but, of course, we weren't talking about uncertainty, but rather the fact that the basic dynamic of

Policy that Increases Costs -> Increased Costs -> Increased Prices -> Reduced Demand -> Lost Economic Activity​

is interpreted as either the Policy's Fault or the Companies' Faults by most folks, depending on whether or not they liked the Policy.

Does a policy you like result in increased costs? It's the Company's fault for having to exist in the real world where costs can impact prices! Do you not like a policy that results in increased costs? Well THEN it's that doggone no-good policy's fault.

How can you plan a 20 year investment like a new manufacturing facility given our current political clown show?

Probably you don't, although I would point out that state and local regulatory burdens and uncertainty also play a role.

Furthermore, additional economic constraint will emerge as goods markets experience shortages, which will drive prices higher.

That seems very plausible, if not (at this point) very likely, though, as you point out, the erratic nature of the tariffs may ameliorate this somewhat (I understand, for example, that folks are purchasing storage up in Canada, with the intent of offloading there, waiting for a periodic dip in the import rate depending on the President's mood / what he had for breakfast, and then pulling it over the border, which would be better than simply "it doesn't ever come".

 

[cpwill]

Remember your fantasies about stagflation? I do!

Yeah, you've attempted to dishonestly depict that before (thought, to be fair, it may simply be that your brain has "cpwill = stagflation claim" as a data point, and you don't bother to validate; it's a busy world out there, and we only have room for so much data in our heads). However, as I have pointed out before:

That is a quote that seems to suggest I have consistently been predicting stagflation over the past 10 years instead of what you actually did which was:

Find a thread from 2011 discussing the fact that inflation was rising at a time when unemployment was also high and growth was low.

Stagflation, of course, being an economic condition characterized by slowing economic growth, high unemployment, and rising prices (inflation) simultaneously.

BUT, whenever you are scrambling because you don't have much in the way of an actual direct response to the point being made, you like to bring it up as though somehow my having discussed 2011 conditions in 2011 means I have to think those are the same conditions that hold in the present day.

If you like, I could go find other posts where you have referenced (for example) bond rates, and then post today's rates as a comparably poor attempt to distract from the point that is actually at hand.?

What have you learned about stagflation since you made the post above?

Which is a useless point. It is just a way to deflect.

I do enjoy that you put these together, apparently without even realizing.





Sure, Kush. Taking a specific instance of Ford and discussing the general dynamics that this instance is part of is a deflection, but trying to dig up a 2011 thread on an entirely different topic regarding economic conditions then and triumphantly laughing about how they aren't economic conditions now totally isn't

 

[cpwill]

Who did this? Please provide citation.

Sure - @dmpi, for example, here in this thread.

Same as above. Please provide citation.

Sure - @Lisa for example, or @Peter, here. OR, for example, this guy named Kushinator. All of them (and plenty of others, it's an easy search) have provided variations of the: "If companies can't survive policy-driven increases in their costs, then they don't deserve to exist" argument when it comes to raising the price of MW labor because they like that policy, and therefore wish to ignore, minimize, or otherwise avoid directly addressing the unintended negative consequences that it comes with.

You know what else we know? Increases in the wage floor didn't lead to the predicted doom and gloom.

I couldn't speak for everyone's predictions out there. But when it comes to harming our most vulnerable by pushing them out of the job-market, the evidence is fairly good.

However - like your earlier attempts to bring in stagflation - this, too, is an attempt to divert from the point being made, which was the basic dynamic that the process of:

Policy that Increases Costs -> Increased Costs -> Increased Prices -> Reduced Demand -> Lost Economic Activity​

is interpreted as either the Policy's Fault or the Companies' Faults by most folks, depending on whether or not they liked the Policy.

A tariff is taxing economic activity.

Indeed it is!

We want to trade with other nations.

Indeed we do!

We don't want prevalent low wage employment.

That is a bit more situational. It may be better to say that we wish to put as many people as possible on the economic ladder of success, which generally includes starting with low-wage employment.

Next we'll be hearing about how high minimum wages encourage illegal immigration.

Oh look! Another attempted red herring.

 

[upsideguy]

"The tariffs are expected to add $2.5 billion in costs overall for the year, mainly related to expenses from importing vehicles from Mexico and China, Ford executives said."

Wait. I thought the consumer was going to pay the cost of the tariff. Now Ford say's they'll end up paying. How many sides of the mouth can you talk out of?

Both things can be true..... the importer pays the tariff. The importer will attempt to increase costs to the consumer. The extent to which they are successful at that depends on the price elasticity of the underlying product. The problem with cars is they tend to be elastic product, so the manufacturer will eat it to some extent, then will take it out on employees with layoffs and pay cuts.

Wide application of tariffs is economic suicide. Sorry that you are oblivious to what is happening around you, but Trump is screwing up royally here and we will ALL pay, in some form or another, for his screw up.

You think Ford is going to reduce the salaries and bonuses their top executives 'earn'? No, Ford is going to pass these new costs onto consumers by raising the prices of their products. It's a golden rule of our capitalist system. Jeez, this is economics 101...

They will certainly attempt to pass the costs along, however automobiles are largely a price elastic product, hence its unlikely they will be able to pass off all of the costs. They will likely eat some of the cost in the short-run, which will first depress the stock price, then will likely result in smaller bonuses, layoffs and wage concessions, to the extent they can.

 

[cpwill]

Whether you would characterize it as a defense or not, it functions as a support of tariffs by pretending that the left supports the same thing.

1. Trade protectionism has, in fact, been a traditional left-leaning idea here in this country, which is why quite a few Democratic politicians find themselves currently in the awkward position of arguing "Okay, Well, But, It's Different When We Do It Because We Wanted To Do It Smart" (which, you may recall, is the same argument that MAGA made about the disaster that was the Afghanistan withdrawal).


2. However - and, this sort of matters when the thing you are trying to describe is "cpwill's position" - I'm not a big-government leftist, whether of the traditional or the MAGA variety, and I think this trade war is insanely stupid and productive both in terms of the intent and the execution.

Of course, they are wildly different things. For example, republicans campaign on cutting taxes, and then they raise our taxes, so they lied

Well, yeah. They are led by a liar, and are generally utterly terrified to say anything that contradicts his Id, ever.

Also, raising taxes is not the same as raising the minimum wage simply because they both push prices up,

Not if the question is "does this push prices up", which was the dynamic being pointed to.

because the price increase goes to the government in the former case and to our pockets in the latter.

Well, I certainly concur that funds that go to the government are funds that have been taken from us, however, no, MW increases do not go "into our pockets", they go into a very few select pockets at the expense of others, as tariffs serve as a subsidy to US producers' pockets at the expense of others.

 

[upsideguy]

It's good to know Trump is ****ing both small and big businesses.

Ford pulls guidance, warns it will take $1.5 billion hit from Trump's tariffs​

View attachment 67568506

For now, Trump is hurting everyone --- large and small businesses, consumers and suppliers, democrats and republicans. Eventually, I expect Trump to personally sell waivers to the tariffs to his friends and wannabe friends.

 

[Cosmo]

It’s amazing isn’t it?

You include a link to the entire article - not even a headline…and then you witness in real time how Ford (in the article) has already negated some of the bullshit our loyal MAGAs are now trying to shove as shit.


In the article, Ford addressed that they were on target to hit prior projections, but how tariffs have directly impacted those projections. Can you read or were you just too lazy to?


They’ve already had to hire bond carriers to entirely skip the US.

Those aren’t US employees.

They’re cutting off part of the US market already - just to mitigate some of the damage and try to keep to their projections.

Skip the US entirely = fewer US jobs.

Read perhaps?

Sounds like the tariffs weren't high enough, so this would move the wealth from stockholders to the government which pays for poor people's handouts.

 

[Deuce]

Ford's just one of these poorly run companies who find will find a lame external excuse to write down a loss to take the pressure off of them. Notice that the CEO couldn't even articulate a rationale and the 1.5 billion number is just a random number drawn out of a hat.

lol this dude is gonna pretend Ford doesn't have a whole team of people trying to analyze the numbers.

 

[Peter]

Sure - @dmpi, for example, here in this thread.



Sure - @Lisa for example, or @Peter, here. OR, for example, this guy named Kushinator. All of them (and plenty of others, it's an easy search) have provided variations of the: "If companies can't survive policy-driven increases in their costs, then they don't deserve to exist" argument when it comes to raising the price of MW labor because they like that policy, and therefore wish to ignore, minimize, or otherwise avoid directly addressing the unintended negative consequences that it comes with.



I couldn't speak for everyone's predictions out there. But when it comes to harming our most vulnerable by pushing them out of the job-market, the evidence is fairly good.

However - like your earlier attempts to bring in stagflation - this, too, is an attempt to divert from the point being made, which was the basic dynamic that the process of:

Policy that Increases Costs -> Increased Costs -> Increased Prices -> Reduced Demand -> Lost Economic Activity​

is interpreted as either the Policy's Fault or the Companies' Faults by most folks, depending on whether or not they liked the Policy.




Indeed it is!




Indeed we do!



That is a bit more situational. It may be better to say that we wish to put as many people as possible on the economic ladder of success, which generally includes starting with low-wage employment.




Oh look! Another attempted red herring.

It's amazing that companies can exist in France with the crippling taxes, 35 hour work week, 30 days holiday a year and maternity/paternity leave.

According to you offering those things in the US would be suicide for the economy.

 

[multivita-man]

"The tariffs are expected to add $2.5 billion in costs overall for the year, mainly related to expenses from importing vehicles from Mexico and China, Ford executives said."

Wait. I thought the consumer was going to pay the cost of the tariff. Now Ford say's they'll end up paying. How many sides of the mouth can you talk out of?

You have absolutely no idea what you're talking about. Nobody at Ford would ever say that because unlike you apparently, Ford knows that's not how tariffs work.

 

[Cosmo]

It's pretty basic stuff. Do you think companies go on hiring sprees when the economic future looks good?

Companies hire when it makes sense. Could mean improving good futures. Could mean reversing bad futures.

 

[cpwill]

It's amazing that companies can exist in France with the crippling taxes, 35 hour work week, 30 days holiday a year and maternity/paternity leave.

According to you offering those things in the US would be suicide for the economy.

I've never said it would end the US economy. I have said it would have deleterious effects - and it would, which is part of why the United States' economy is (recent upheaval notwithstanding) superior to the French one.

 

[ElChupacabra]

Companies hire when it makes sense. Could mean improving good futures. Could mean reversing bad futures.

...and they tend not to hire when it looks like the climate may mean losses.

 

[forn]

He’ll pull back all the “big” tariffs and leave the 10% across the board tax on imports to function like a sales tax, a tax that hits all of us pretty hard but not billionaires like him. Then, he’ll use the excess revenue to pay for another massive handout to billionaires.

Yeah, because billionaires rely a lot on their tips, overtime, and social security.

 

[forn]

Ford pulls guidance, warns it will take $1.5 billion hit from Trump's tariffs​

View attachment 67568506

Nothing bad about "automakers with the largest U.S. footprint will have a big advantage."

 

[ncguy]

Nothing bad about "automakers with the largest U.S. footprint will have a big advantage."

if tariffs result in higher prices that hurt a lot of americans, that would be bad.

 

[CLAX1911]

It's good to know Trump is ****ing both small and big businesses.

Ford pulls guidance, warns it will take $1.5 billion hit from Trump's tariffs​

View attachment 67568506

Ford has been ****ing customers for over a century.

 

[Kushinator]

Are you really trying to inject industry terms that do not change the actual dynamics under discussion in an attempt to obfuscate?

Industry terms?

Raising prices doesn't reduce demand. I didn't know what else you want me to say.

Oh neat. And no tariffs are ever scheduled because they only ever - ever, ever - get put in place in a chaotic and utterly unplanned manner seemingly designed to maximize chaos and media attention, even at the cost of massive uncertainty and loss in the actual market?

We're not discussing possible tariffs. We are discussing our current reality while you tried to help someone deflect from terrible policy by saying that non-Republicans support wage floors.

I get that you don't like wage floors, but that has nothing to do with the discussion. So you may continue on that tangent, but I won't be participating... unless you want to start a thread to revisit the massive inflation, bankruptcy, and job losses that have resulted from increasing the minimum wage. I'll be there.

Hey, out of curiosity, do tariffs only increase the costs of importing goods when they are being put in place in a chaotic and unplanned way?

They also increase the cost of domestic goods that are manufactured with imported inputs. But that is beside the point.

Like, for example, if we just decided to maintain a 10% baseline globally from now on, and I was trying to import a batch of T-Shirts in 2028, could I just go to the Customs official and say "Hey, so, b-dubs, I know it says that I have to pay you 10%, but, this has actually been pretty stable now, so, in fact, I don't, and therefore this won't increase my costs."?

I have no idea what you're trying to say

Solidly concur, but, of course, we weren't talking about uncertainty, but rather the fact that the basic dynamic of

Policy that Increases Costs -> Increased Costs -> Increased Prices -> Reduced Demand -> Lost Economic Activity​

Increased prices do not reduce demand.

Things that reduce demand are reductions in income, tiger credit standards, higher interest rates, reduced government spending, etc....

Increased prices are a matter of supply and demand.

is interpreted as either the Policy's Fault or the Companies' Faults by most folks, depending on whether or not they liked the Policy.

That's too bad.

Does a policy you like result in increased costs?

Maybe. But we to understand the magnitude and other anxiety effects before we can speculate on a policy's potential success or failure. And then how do we define success?

It's more complicated than your incorrect flow.

It's the Company's fault for having to exist in the real world where costs can impact prices! Do you not like a policy that results in increased costs? Well THEN it's that doggone no-good policy's fault.

I didn't understand what you mean.

Probably you don't, although I would point out that state and local regulatory burdens and uncertainty also play a role.

Sure. I would never deny that fact.

That seems very plausible, if not (at this point) very likely, though, as you point out, the erratic nature of the tariffs may ameliorate this somewhat (I understand, for example, that folks are purchasing storage up in Canada, with the intent of offloading there, waiting for a periodic dip in the import rate depending on the President's mood / what he had for breakfast, and then pulling it over the border, which would be better than simply "it doesn't ever come".

That's the problem with this type of policy environment. It breeds unproductive speculation which draws investment to rent seeking.

 

[Kushinator]

Sure - @dmpi, for example, here in this thread.



Sure - @Lisa for example, or @Peter, here. OR, for example, this guy named Kushinator. All of them (and plenty of others, it's an easy search) have provided variations of the: "If companies can't survive policy-driven increases in their costs, then they don't deserve to exist" argument when it comes to raising the price of MW labor because they like that policy, and therefore wish to ignore, minimize, or otherwise avoid directly addressing the unintended negative consequences that it comes with.

Nobody has been arguing such things in this thread. You're trying to attack a strawman by taking arguments from other threads / topics and attacking them here without context.

However - like your earlier attempts to bring in stagflation - this, too, is an attempt to divert from the point being made, which was the basic dynamic that the process of:

Policy that Increases Costs -> Increased Costs -> Increased Prices -> Reduced Demand -> Lost Economic Activity​

You have no point. Finally you can claim victory though. Stagflation is coming, not because of why you thought

That is a bit more situational. It may be better to say that we wish to put as many people as possible on the economic ladder of success, which generally includes starting with low-wage employment.

Perfectly simplistic and therefore not very useful.

I have never heard anyone ever not being able to find a job because the minimum wage pays too much. That's fantasy.

Oh look! Another attempted red herring.

Better than both sides....