Trump’s 25% Auto Tariff: America’s Car Crisis Begins!

If you don't want China controlling America, then you need to make sure that America can produce and manage and manufacture what it needs. Otherwise, China will control America. As a country, you put yourself in a position of extreme weakness by relying on other countries to supply all of the things that you need to manage your country. Listen, tariffs are going to lead to higher prices for consumers, flat out. You cannot sugarcoat that. You cannot hide that or sweep that under the rug, right? Guys, Trump's 25% auto tariff is now. The American car crisis begins. Guys, on this quick video, I want to give you everything you need to know about these automotive tariffs that we're seeing about in the news right now. If you have a question, a comment, drop it below and I'll answer it for you. Look, I want to later on in the video give you the pros and cons of this thing and how it may affect us as consumers. All right, so let's just jump right in. First, you've got to know that Trump has already set a 25% tariff on imported steel and aluminum and a 25% tariff on goods imported in from Mexico and Canada. Those things are already in place as well as I think a 20% tariff on China. So those things are already in place, right? But what's coming up here in the next 24 hours or less is that Trump has declared a 25% tariff on all imported automobiles and automobile parts, right? The 25% auto tariffs that's coming in the next 24 hours, they're going to apply to imported passenger vehicles. It's vehicles that are coming into America. That includes cars, SUVs, minivans, cargo vans, and also light trucks as well, right? And automotive parts. Anything that's imported from anywhere else is going to have a 25% tariff levied on it. Now, what is a tariff? A tariff is just a tax, guys, okay? Don't overthink the word tariff. You hear the word duties or tariff or tax, they're all the same thing. So starting in a day, Trump is calling this thing like Liberation Day, right? These 25% auto tariffs are going to kick off. Now, listen, I've got some comments where people say, well, why doesn't Congress just step in and do away with this? Listen, that's because Congress has really given over a lot of its rights in terms of trade and tariffs to the president, to the executive branch. The president is operating under the authority of trade laws, right? Okay, there's a section 232 of the Trade Expansion Act of, I think, 1961 or 62. That trade act, that section allows a president to impose restrictions, including tariffs, if imports are deemed to be a threat to national security somehow or another. Now, this law does not, this section of this law does not require Congress's approval. So it gives the president wide discretion on what they want to do in terms of implementing anything involving trade and imports and exports involves trade, right? Now, the Congress could come through and say, okay, we're going to repeal that section to take back some of those powers, but that's been tried before. It usually never works, right? And so therefore, presidents have a wide range of opportunities to do what they want to do in terms of trade, in terms of imports and exports, right? So this is why the president has the power to do what the president is doing in terms of tariffs. It's just that all presidents have had this power, but most typically don't exercise it to this level. So these taxes are going to start on imported autos and imported automotive parts coming into America. Now, I don't know what you've heard in the news, but I'm going to give you this from my perspective and I'm going to try to make it as plain as I can for you. Okay. So plain language, right? So first things, there's a couple of things we got to know upfront, right? The automotive industry, I want you to understand how big this is. The automotive industry in America is a $1.6 trillion industry. So this is not small beans, right? This is like massive economic stuff that's happening. Now, America imported about 8 million cars into our country last year. Those 8 million cars or vehicles, actually vehicles, those 8 million vehicles that were imported accounted for almost half of all sales of cars and vehicles in the US last year. So again, we're talking about hundreds and hundreds of billions of dollars into the trillion, right? So let's be clear about this before I go further. How do tariffs work? The business that imports the part is who pays the tariff. Remember, tariff equals tax. So the business that imports whatever they need, whatever good we need to use to manufacture whatever we're trying to build or sell in America, that company or corporation is the one who pays these 25% tariffs on these cars or goods, being our automotive parts that are being imported. So the business pays the tax. And usually what happens with most businesses is they pass that tax on to the consumer, me and you. And this is why people say that a tariff is really just a tax on the consumer. Because ultimately, if that business wants to stay in business, they have to raise their prices to account for the increase in taxes they had to pay in order to get that thing over here, right? In America, there's several goals of tariffs. The goal of a tariff typically though, is to raise the price of that good being imported from another country to make that country's good look unattractive to businesses who may rely on it, right? So a business turns to a domestic product or a domestic item that they can use in place of that imported good that was so expensive to bring in, right? Or a business may decide to make it here themselves, right? If they have the capital and the ability to do it. So in this case, if an automotive company wants to sell an import, an imported car, or they want to use an imported automotive part to do whatever they're doing to make whatever they want to make, they have to pay an additional 25%. That's a big tax. So a business says, instead of getting it from some other country and having to pay all this extra money for tariff, I'm going to get it here locally in my own country. So when I buy a domestic good to resell, I won't have to raise prices because we're making it right here in America, in Maine, or in Michigan, or in Wisconsin, or in Florida, California. I can get my part from in America as opposed to outside of America. Now the other goal, as stated by Trump and his people and his group, his executive branch, is that they want to create a trade balance with these tariffs, okay? Now let me explain a trade balance and a trade imbalance so you understand what's happening. Here's what happens around the world to create what some people say is a trade imbalance, okay? If I'm, and I'll just give you a real basic example. If I'm an American company and I sell, let's say hats, I make and sell hats right here in America. But India has a 100%, the country of India has a 100% tariff on American hats, American made hats coming into their country. They've imposed a 100% tariff on American made hats. And I'm using hats as an example. Then companies in India are going to not be selling American made hats because the companies in India would have to pay a huge 100% tariff on American made imports of hats, right? Think about how this works. Those Indian companies would have to pay a large tariff on hats, American made hats. So those Indian countries probably won't be buying or importing into their country my American made hat that I have a company and I make in America. However, over here in America have only a 10% tariff on Indian made hats. So Indian companies in India, they can cheaply ship and sell their hats over here in America because the tariff is only 10%. We've only placed a 10% tariff on Indian made hats coming to America, but India has placed a 100% tariff on American made hats over in India. So American companies can't really sell our hats, my hats in India because of that 100% tariff. That's called an unfair trade balance, right? Or an imbalance in trading. So what these tariffs on automobiles and imported automobiles and automotive parts is saying is whatever tariff you charge for an item to be imported or come into your country, we're going to charge the same tariff for your item to come into our country. So if you charge 100% tariff on American made hats, then we're going to charge 100% tariff on Indian made hats in our country. So that creates, so they want to create an equal trade balance, right? Think about it. If I'm selling a hat, American made hat, and India has a 100% tariff on American made hats, then essentially what India has done is they blocked my export and shut down a whole market of a billion people or more that I could sell my American made hat to. So you can go over to India and you'll never see an American made hat because of the high tariffs. So those Indian companies will only be buying hats from other Indian companies. So this essentially is what is taking place with these automotive tariffs and Trump wanting to impose these tariffs to balance out this trade. You have a lot of American made products that are blocked from being sold in other countries and it's a trade imbalance. But meanwhile, over here in America, you have traditionally had fairly low tariffs on a lot of imports and basically charge most countries almost nothing to sell their foreign products in America. Now you can call it, now that's just an example, but you can call this what you want to call it. And we can speculate all day about motives, the rich, Trump and Elon or whatever. But I'm just telling you what is happening and trying to explain this trade imbalance to you because I see a lot of stuff on TV and the news and social media and around the world, even other countries' reports from around the world that tell you that you should be mad as an American, you should be upset as an American because your prices are going to go up. But it's deeper than that. When you watch ABC, CBS, NBC, they're going to tell you, you should be angry. But I'm telling you that there's two sides of this story, right? And by the way, I didn't mention this, but countries, they don't have to necessarily impose the same tariff on all goods coming into their country. So we may have a 25% tariff on automotive parts and automobiles that are imported, but we might have a 10% tariff on agricultural products or a 5% tariff on something else. And the other thing that you need to know about tariffs is that a country can place a different tariff on cars coming from different countries. So we could have a 10% tariff on cars coming from the UK and maybe a 25% tariff on cars coming from China, right? So tariffs are usually used as sort of bartering tools, negotiating tools, etc. That's all a tariff is, it's just a tax on something coming into your country, right? And the business has to pay the tariff if they want to ship that item in from a different country. Listen, this is all imports and exports stuff that we learned in 10th grade history class, right? When half of us, including me, was sleep, right? But this is all it is, right? Now, typically speaking, let me get back to this. Typically speaking, the goal of a tariff is to make imports so expensive that businesses want to buy right here in America from businesses that are in America or who have decided to build in America or have decided to buy American, right? And I think there's another important point to this that I'm not going to go too deep into this quick video, but we have a $36 trillion debt in America. And I really believe this deficit that America is running on, I think Trump may be wanting to find money to lower that debt. I could be wrong. Look, it's just a thought, right? Now guys, if you specifically want to know whether or not your car or car that you like or enjoy a maker model is going to be affected by tariffs, here's a really good article about how 25% tariffs on all imported cars will affect every single model. Now this article is on car and driver, and I think I'll leave a link to this article below in the description box of this video. It talks about how these 25% tariffs are going to affect us. And it says with half of all the cars sold in the U.S. each year imported, and with almost 60% of all auto parts imported, this 25% tariff is going to have an enormous effect. And it goes on to say that most of the parts imported are from Canada and Mexico. Now this article goes on to list like all of the different makes and models and where they're actually made and manufactured, right? From Hyundai to Honda, you see a Buick is there, Cadillac, you've got Jeep, Kia. Of course there's Lincoln, there's Maserati, et cetera, right? Porsche, Rolls Royce, if you happen to have one, right? Subarus, Toyotas, et cetera. So very nice article, guys, I'm going to link to this in the description box below so you can check it out on your own. Now let's talk pros and cons real quick, and the effect on the consumers. The bottom line, guys, is almost all vehicles are going to be affected somehow by these tariffs, right? Some are going to be affected much more than others. And it's going to affect the new car market, we know, but it's also probably going to affect the used car market. And probably bigger than anything else, these tariffs are going to affect the repair and maintenance market. So you go in and get an oil change that was $70 before, now it might be 75 bucks, now it might be 80 bucks, right? But the repair and maintenance market is still hundreds of billions of dollars. Now some experts are predicting that the new car prices are going to go up maybe $4,000 or $5,000 shortly after these tariffs get imposed. So should you go out and buy a new car right now? Maybe, I don't know, right? Perhaps. Should you panic? I don't think you should panic necessarily, right? But let's talk about some of the good and bad. Let's talk about the pros. Okay, pros first, because you never really hear much about the potential good of these tariffs, right? So I'm going to give you the pros, but then I'm going to give you the cons as well. But the reason is, I want you to see both sides, and I want you also to see it from a business perspective, and I want you to see it from an American consumer perspective, and as an investor, right, in the stock market. So pros, first thing is this, potential job creation. Tariffs could incentivize automakers to relocate production right here in the United States, right? This could take a while, obviously. It's not going to happen overnight. This could take five or 10 years down the road, because it takes time to stand up or set up a whole new manufacturing company, obviously, right? But it could increase new jobs and revitalize sort of this domestic manufacturing that has really left America a long time ago. I think UAW, the United Auto Workers president, who was not a fan of Donald Trump, I don't think he endorsed Donald Trump necessarily personally, but he's actually come out and endorsed these tariffs, suggesting that these tariffs could bring work back to the US and US plants and American plants, all the stuff we lost 40, 50 years ago. The other potential pro is national security. The Trump administration really contends that if they reduce the reliance on foreign autos and foreign auto production, then that's going to help our national security. You might be saying, well, how? How do you help national security by making sure that we rely less on foreign automotive parts and automobiles, right? Because here's what happened, guys. This is why that's important. Because the more you rely on other countries to supply the things that you use and need as a country, the more you're going to be at that other country's beck and call and twiddled around their finger. If you constantly rely on them for every single thing that you need, you ultimately weaken you and weaken your national security and weaken your ability to take care of and manage yourself as a country. See, a lot of us, we really don't think about the fact that, look, if you don't want China controlling America, then you need to make sure that America can produce and manage and manufacture what it needs. Otherwise, China will control America and your national security will be at stake. Right. Imagine if you relied on me for all of your food to eat. Well, guess what? I now control you. Forget about the army you got, because the army don't mean nothing. I can cut off your supply for food if I'm supplying all your food. I can cut it off and you can't. Doesn't matter what you can do. You can't strong arm me. As a country, you put yourself in a position of extreme weakness by relying on other countries to supply all of the things that you need to manage your country. Right. Another positive thing is that these fair trade practices, right, when you impose tariffs, it will address some of these unfair trade subsidies, right, that take place. And it levels the playing field, so to speak, for American manufacture, for American businesses. It levels. Think about it. If I make hats in America, but you can go get cheaper hats from over in China for half the price, then are you going to be buying hats from me? No, you're going to be going buying hats from China. So American businesses lose when other countries can sell you their goods cheaper, right? Just something to think about. And finally, in terms of pros, guys, how about revenue generation? There was a report, I think I read yesterday, where some official came out and said that tariffs could raise about $6 trillion in revenue over the next 10 years. And that's possible, right? Now, let's talk about the cons, the problems, the issues, the reason this thing has warning and danger all over it in terms of tariffs on these automobiles, imported, and these automotive parts. Listen, tariffs are going to lead to higher prices for consumers, flat out. You cannot sugarcoat that. You cannot hide that or sweep that under the rug, right? Again, there's estimates that say up to $5,000 to $10,000 is going to be added to the price of a new car, not to mention added pressure on inflation could be a result of this and a strain on the automotive industry. Look, imposing 25% tariffs on things coming in from Mexico and Canada, which is where we get a lot of this stuff from, that could ultimately lead to some supply chain issues. And all of that increases, again, the cost and the cost for repair and maintenance on even you may be saying, hey, I'm not going to buy a car. So how does this affect me? If you have a used car and you all of a sudden need a transmission, then that transmission could end up costing you instead of $3,000, it could cost you $4,500. That makes a difference. Not to mention, this is another big issue is these, what they call retaliatory tariffs. So you have the potential for trade wars. You could have other countries that retaliate and start this trade war that could escalate into a broader conflict that may harm many areas of our U.S. economy, right? And trade wars can turn into real wars if you're not careful. So you've got to be careful with your foreign relations when you're imposing this heavy tariffs on folks out of the blue, right? And of course, one of the obvious cons or problems with these tariffs is that they're going to impact profits for automotive companies, right? This includes major U.S. manufacturers. They may experience some reduced profit. And when you reduce the profit by increasing production costs, because imports or taxes are a big part of a production cost, when you reduce their profit, that could lead to cutting the workforce. If a company does a lot of imports and now they have to pay this large tax on these imports, guess what? They may raise the price of the car or the automotive parts, but they may also lay off workers at the same time. So now you have a potential for people losing their jobs as a result of these tariffs that cause these companies to have to pay more. And then, of course, there's a stock market, right? Anytime there's talk of tariffs, if you look at the stock market recently, it's been way down. And part of the reason it's been way down because of the uncertainty that these talks of tariffs have added to investors. Now, obviously, as an investor, we know that down markets always represent opportunities. But when the stock market goes down, the fact is people lose money, especially regular investors like you and me, right? Institutional investors, they move their money around to fix the assets and all that good stuff. We ain't moving our money around necessarily like big institutional investors. So we're going to lose a little bit of money. We know that the 25 percent tariffs on imported automobiles and auto parts are intended or probably intended perhaps to strengthen the domestic manufacturing and address the trade imbalances, add to the revenue and maybe lower our overall national debt. Who knows? Right. But they also pose some very, very significant risk, including most importantly for all of us, mostly as higher consumer prices and the potential to add to inflation, industry disruptions, international trade disputes, all those things, perhaps layoffs. So there's some give and there's some take. There's some good. There's some bad. Right. We may be looking at short term pain for long term gain. We just don't know. Look, if you're an investor in the stock market, you can start looking for these opportunities. Look, anytime something is happening in the economy, somebody somewhere is getting wealthy from it. Somebody somewhere is getting rich. You need to begin as an investor in America to put yourself in those positions, too. Right. You see Ford moving to manufacture here in America because of these tariffs. That's your clue. Or I think a couple of weeks ago we saw Hyundai said that they're going to invest billions of dollars into America with a new facility and bring on a potential fifteen hundred jobs. Listen, that may be your opportunity as an investor. Right. Figure out always how you can take advantage. Maybe there are stocks and ETFs that will benefit from greater domestic production. Figure that out. Pay attention to what's going on and the opportunities in the midst of some of these storms that we're seeing as an investor. Somebody asked me on a video a couple of days ago, they said, I'm confused. Whose side are you on? Look, here's my answer. I'm on the side of the American consumer. The American investor, the American business. I'm trying to make more money, save more money, invest more money, pass down generationally more money and prepare us to be ready for whatever is taking place in the economy with these tariffs. So my job is to figure out how to do all that, no matter what's taking place in the market. I want to see America win because I live here in America. Listen, I just wanted to give you the facts in this video, not tell you how to think, not tell you what to think, but just simply encourage you to think for yourself. Look, make up your own mind on where you stand on these tariffs based on your portfolio and your goals. What? Prepare and be ready. Look, these Trump's 25% auto tariffs, it looks like they're taking place and there could be a car crisis that begins on the day that takes place. So you got to get ready and be ready. First, you've got to be strapped with the right information that's unbiased and plan your life and your financial life around the facts and not around the emotion that CNN, ABC, Fox, CBS, USA Today, whatever, not around all the emotion that they're trying to spark up, but around what you think based on the information you've went out and researched for yourself. I hope I was clearly able to answer guys. What are tariffs? What is the imbalance in the, in the trade agreement? How are these automotive tariffs and tariffs on imported autos? How are they going to affect us? Good, bad, right? Pros and cons. And I hope I gave you something to think about. Look, I got dogs in the fight, me, my family, you, right? And my job has always been to figure out how to help us manage this thing and find opportunities in the midst. Right? Drop a comment and let me know what you think, guys. The best person who's going to take care of the old you is the young you. Guys, take good care of yourself and take care of other people. I'll let you in the next video. Peace.