The Tariff Thread

[Azure]

Originally Posted by bizaro86

There's already a decent variety of vehicles built in Canada.

Honda CR-V, Civic, the Toyota RAV4, Lexus RX, Ford Edge, Ford GT, Chrysler Pacifica, and Dodge Charger Daytona plus Chevy Silverado, chevy Equinox.

That's a pretty good spread. A number of small/midsize SUVs, small car, minivan, truck, a couple of sporty cars.

If those models were 25% cheaper than the competition their market share would go way up. It's missing a larger car and 3 row suv, but is otherwise pretty complete by vehicle form.

80% of those vehicles are then sold into the US.....

Yes, better pricing would dictate that more would be sold in Canada, but that number would not really change much anytime soon. We'd still see major, major job losses, price increases, etc.

[calculoso]

Originally Posted by Azure

https://twitter.com/user/status/1905616997510971715

With the move to “just in time manufacturing” and deliberate minimal inventories, I’m not sure how much this will be possible. The parts manufacturers may not have much in the way of inventory for their source materials (whether other parts or raw metals etc) and pressing their suppliers to speed up will their increase costs in the form of expedite fees.

Guess it depends on what is meant by surge and if they just divert existing manufacturing, delaying any orders for non-USSA destinations.

[calgarygeologist]

Originally Posted by Fuzz

The problem is a lot of parts for those come from US facilities. And for any of the American manufacturers, they'll be moving their stuff to the much larger US market if this carries on. Are the engines for Honda and Toyota's made in Canada or the US? If the US I guess they could be shipped here from Japanese facilities.

Honda and Toyota don't make engines in Canada. I think it is only Stellantis and Ford that make engines in Canada.

[Fuzz]

Originally Posted by calgarygeologist

Honda and Toyota don't make engines in Canada. I think it is only Stellantis and Ford that make engines in Canada.

Chevy has the St Catherine's engine plant, but that's just one V8 and a transmission. It would be expensive to retool, but if that stuff gets moved to the US, it opens up production capacity. Less efficient, but could be an option.

[SportsJunky]

The company that I work for is a large U.S. corporation. We have dozens of plants globally and a handful of the biggest are in Canada and the U.S. Recently, my days are consumed with meetings about taxes, tariffs, importers of record, etc... These are not simple black and white scenarios. Tons of gray. Do we implement these changes knowing that they could be scaled up or down or outright cancelled based on the whims of either government? Do we put into place a tariff based surcharge or send out material price increases? Do we lead out or wait and react to what our competitors do? Just a ####ing nightmare.

[PeteMoss]

Originally Posted by SportsJunky

The company that I work for is a large U.S. corporation. We have dozens of plants globally and a handful of the biggest are in Canada and the U.S. Recently, my days are consumed with meetings about taxes, tariffs, importers of record, etc... These are not simple black and white scenarios. Tons of gray. Do we implement these changes knowing that they could be scaled up or down or outright cancelled based on the whims of either government? Do we put into place a tariff based surcharge or send out material price increases? Do we lead out or wait and react to what our competitors do? Just a ####ing nightmare.

This is the problem. Businesses aren't going to like making billion dollar decisions when the guy can change his mind tomorrow and make the whole exercise pointless. At this point - I suspect a lot of companies are just going to raise prices to cover tariffs and see what happens (along with making spending promises to the US that may or may not ever happen)

[CroFlames]

Originally Posted by SportsJunky

The company that I work for is a large U.S. corporation. We have dozens of plants globally and a handful of the biggest are in Canada and the U.S. Recently, my days are consumed with meetings about taxes, tariffs, importers of record, etc... These are not simple black and white scenarios. Tons of gray. Do we implement these changes knowing that they could be scaled up or down or outright cancelled based on the whims of either government? Do we put into place a tariff based surcharge or send out material price increases? Do we lead out or wait and react to what our competitors do? Just a ####ing nightmare.

Do we work for the same company?

What a ####ing nightmare it's been since Jan 20. I'm exhausted.

[WideReceiver]

Originally Posted by bizaro86

There's already a decent variety of vehicles built in Canada.

Honda CR-V, Civic, the Toyota RAV4, Lexus RX, Ford Edge, Ford GT, Chrysler Pacifica, and Dodge Charger Daytona plus Chevy Silverado, chevy Equinox.

That's a pretty good spread. A number of small/midsize SUVs, small car, minivan, truck, a couple of sporty cars.

If those models were 25% cheaper than the competition their market share would go way up. It's missing a larger car and 3 row suv, but is otherwise pretty complete by vehicle form.

A Toyota sales lady told me a RAV4 would likely be impacted by tariffs. In her defence, it was three weeks ago and it likely was just early speculation, or maybe she was referring to some assembly or parts that may come from the U.S., not the whole vehicle.

I don’t see the Subaru Forester on that list?

[#-3]

Originally Posted by CorsiHockeyLeague

Everyone really enjoys piling on Azure here but the "all in Canada auto manufacturing network" idea seems pretty dumb to me, too.

If the thinking is that we just have to outlast this and everything will go back to normal in a few years (or sooner if he dies), then why make dramatic shifts in the way the industry works? If the thinking is that trade barriers between the USA and Canada is the new normal, or that we should act like it is, then it makes even less sense, because without selling cars to Americans there's no point in manufacturing them in Canada at all - no one else will buy them.

I think this is right but not for the reason you state.

the real question is what does an All Canadian Auto Manufacturing Network mean?

at some point in the process almost all of these cars are designed in the US or Japan or Germany.

The Iron Ore in Ontario almost exclusively comes from the Great Lakes region US or over seas, because of the location of their import terminals and where Canada is able to mine iron. It is more efficient for us to buy ore from Ohio and sell ore to China than it is for us to try and get our ore to the Ontario peninsula.

The Micro chips all come from Taiwan. Our likely next best option was the US, if Trump doesn't accidentally destroy the manufacturing Biden was nearing success in right-shoring. This is not an industry about to setup shop in Canada.

Modern auto factories are actually designed with a limited range, once of the reasons they can be so automated is that the variety is actually quiet low. Currently Canada manufactures fewer than 2 dozen different make/models of cars. Sure we could ramp up and build enough to supply our market, but once you decide you want a truck or a van or a hatchback.... you would likely be down to 1 to 2 choices on the market.

I am sure there are other problems, but the real problem is what does "All Canadian" mean. at what point in the supply chain do you mandate Canadianess, and at what point is it OK to source out global products.

[bizaro86]

Originally Posted by calgarygeologist

Honda and Toyota don't make engines in Canada. I think it is only Stellantis and Ford that make engines in Canada.

Honda has a large facility that makes 4 cylinder engines beside the plants that make the Civic and CRV

[surferguy]

I’m just going to import a 20 yr old JDM van from Japan with 40,000 km and be happy with a quality vehicle.

[bizaro86]

Originally Posted by WideReceiver

A Toyota sales lady told me a RAV4 would likely be impacted by tariffs. In her defence, it was three weeks ago and it likely was just early speculation, or maybe she was referring to some assembly or parts that may come from the U.S., not the whole vehicle.

I don’t see the Subaru Forester on that list?

Subaru only manufactures in Japan and the US

[WideReceiver]

I need to see if I can get a Forester made in Japan.

[Sliver]

Originally Posted by surferguy

I’m just going to import a 20 yr old JDM van from Japan with 40,000 km and be happy with a quality vehicle.

My gut on importing a JDM vehicle says if it was good it would stay in Japan. There's no way they're sending their best to us. How can it be a fair price, plus you're adding shipping across the world and 1200kms inland? I've never thought it makes sense, but I've never done it and I could be way off.

[surferguy]

Originally Posted by Sliver

My gut on importing a JDM vehicle says if it was good it would stay in Japan. There's no way they're sending their best to us. How can it be a fair price, plus you're adding shipping across the world and 1200kms inland? I've never thought it makes sense, but I've never done it and I could be way off.

Fair statement. I just like their vans. They are not the size of a yacht but still offer roomy insides. Japanese efficiencies vs F150.

[TrentCrimmIndependent]

I don't think cars have changed a ton in the last 5 years. I'd just get something used off a lot.

With the wait times, long winded contracts with some questionable fine print, strings attached and now tariffs, buying new is kind of stupid.

[you&me]

Originally Posted by Sliver

My gut on importing a JDM vehicle says if it was good it would stay in Japan. There's no way they're sending their best to us. How can it be a fair price, plus you're adding shipping across the world and 1200kms inland? I've never thought it makes sense, but I've never done it and I could be way off.

I believe Japan has prohibitively expensive road taxes for older cars, which is why a lot of them get exported. On top of that, the Yen has been in a relative lull for years and currently near historical lows.

And, like anything else, that dictates where the vehicles go... They don't filter through the availability to keep the best for themselves. Just like the export market here; if there's an arbitrage and someone can make money, it won't matter if it's a perfect cream-puff or written off, rolled back, lemon - if there's a buyer somewhere that will pay more than it's worth in the domestic market, the vehicle will be exported.

Lastly, ocean freight is shockingly inexpensive, especially for smaller cars where you can fit two or more in a container, so getting a car from Japan to, say, Vancouver is really not a factor in the calculus... Getting it that last ~1200km as you say, that's where they get ya.

[you&me]

On a personal note, the tariffs suck. We have a new car order in and there is no Canadian-production equivalent... In fact, as alluded to by other posters, there are entire vehicle segments and classes that aren't produced in Canada, so the idea of keeping all Canadian production to meet domestic demand is a bit of an uphill battle.

[Fuzz]

Ya, after I think 10 years it's usually cheaper for Japan to export vehicles than keep them.

[Cappy]

https://www.detroitnews.com/story/bu...s/82582286007/

These tariffs are really helping American workers