Toyota explains the Trump Administration: How damaging the tariffs are on the Auto Industry!
Just as the letter is leaked from Stephen Ciccone, Group Vice President of Government Affairs within the Toyota Motor North America INC, who had written this leaked letter to the Secretary of Commerce Wilbur Ross. Who has defended the tariffs on steel and aluminum, which has been on the European Union and NAFTA trading partners.
The reason why this letter is interesting, is because what he reveals, that the Government and Trump Administration will not reveal. The cost of the tariffs will be in jobs in the United States and also for the consumers. The most popular car produced by Toyota, the Toyota Camry with 30 % Foreign Parts, will be costing $ 1,800 more. The company has translated the cost, if the companies put the cost and compensation on the consumers. It would be 25%, an estimated loss of sales because of it could be up 2 million units or 10 % annually. If these numbers are true, than the Trump Administration are not only destroying imports, but local production and car-sales in general. That all because of the tariffs on these set-fixated goods, which is used to produce cars.
Therefore, these tariffs made are directly as the Toyota Company in the United States through the whole chain from factory to the consumer are around 470,000 people hired through the chain. While the manufacturing piece alone is 137,000 in 10 factories (soon 11). They are in Kentucky, Indiana, Mississippi, Texas, California, Alabama, Missouri, Tennessee, Michigan and West Virginia. So it is not like this is just hitting the favorable blue-states, which the Republicans hate. This would hit in the middle of the rust-belts and heartland f the Trump Voter.
Toyota Motor has really put themselves strategically in the United States, as well as put themselves in the midst of ironic territory. As they are in the areas where the President got the most support and also has the strongest loyalty, even as they are not serving the principals of the trade. The cost will be taken by the same people who voted him in and the added cost will be on the voters themselves. Either in lose of jobs in manufacturing, if not in lack of sales as people cannot afford to buy as many cars as they could before. That is not weird as the wages in the United States has been stagnant for so long. Therefore, the rise of prices combined with lack of surging wages, they cannot manage to afford the luxury of new cars, even used ones.
Just imagine the sudden rise of 25% on each imported car and also close to 2 Grands more expensive Camry. That will be costly for plenty of people. That is not mere cents on the can of beans as Wilbur Ross did on TV after the tariffs was made public. This here is much more costly and actually affect as many as 470,000 people in the United States. That is only in Toyota, what about the all American General Motors or FORD? Who knows how they will be hurt or how much added cost this will have on the consumer? Even how many people in their production chain from manufacturing to the consumer will be hurt by these efforts made by the state?
If Toyota is sending this warning and show the real affects on the economy by doing so. In just one company, what will it do to the whole industry and also the possible outcome of the provisions made by the tariff. That should be striking, but wisdom is rare in this administration. They are not concern with other, than their own pride and deluded acts of ignorance. This is destroying industry, not creating or salvaging anything.
Toyota is sending a signal to the Trump Administration, but will they care? No they won’t, unless they are Russian Oligarchs or Putin’s henchmen in the US. Peace.