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What on earth makes you think Americans will buy a car that costs $3,000 more instead of buying other comparable cars that don't cost $3,000 more?
I mean, are those cars affected by the tariff the ONLY cars available to US consumers? I don't think so.
The reality is this: People won't buy those cars. Canada and Mexico won't be able to sell those cars. Both countries lose money. American buyers will still buy cars...but they won't be buying those more expensive cars.
Tell me again...who, exactly, will be hurt by these tariffs on Canada and Mexico.
America will be harmed. Those cars you call Canadian and Mexican are American. Ford and GM. If those cars stop selling, which is the likely outcome of the Tariffs then Ford and GM suffer. Those companies have debt to service, and unlike the Congress can’t just create money.
Among the things affected by the Tariffs will be gasoline. European, Japanese, and Korean cars will sell better with higher gas prices. Ford and GM will likely have to file for bankruptcy before the summer is done.
There are a lot of American Companies with factories in Mexico. Caterpillar as one example. The price on those goes up and suddenly other makers look more attractive.
Now you may say these companies should be encouraged to bring the factories home. That may be but such a move is expensive and takes more than a couple days to get started. Getting funding while having reduced income will also be difficult. Odds are that many of those companies will simply cease to exist.
Now personally I’m finding all this very funny. I am watching the FA and soon we will see the FO part. In a few years the best built and best selling American car is likely to be a Toyota.