TRUMP'S TARIFFS BACKFIRE! EU Auto Makers Threaten to Remove Cheap Cars From US Market 🤯

Welcome to the Bill Kelly podcast, critical discussions in critical times.Here's your host, Bill Kelly.

Hey, welcome to another edition of the Bill Kelly podcast, critical discussions.in these critical times.I'm your host, Bill Kelly.I want to draw your attention to an article that caught my eye because I think it encapsulates a lot of the concerns and problems that we have and the impact that Donald Trump, I mean, the negative impact that Donald Trump is having on economies, not just in the United States, but worldwide.This is an article that appeared in the National Post a couple of days ago, in May, the 10th, I believe it was.The title of the article is Trump's auto tariffs are soaking American buyers, and it's only getting worse.

Now, the author of the piece is J .D.DeSill, who is a writer, an American writer based in Arizona.He's involved with the Reason magazine, which you may or may not be aware of.It's a kind of small C conservative magazine about business and free trade and free enterprise and things of this nature.Anyway, he's written before, and I've read some of his other materials, and it's informative.

even if you don't agree with every aspect of it.But he writes in this particular piece, he said, in a sort of a tantrum, U .S.President Donald Trump last week threatened to impose 25 % tariffs on European cars and trucks entering the United States.That's up from the 15 % that he had agreed to last year.Here he goes again, breaking his own deals, right?

The announcement sparked understandable outrage from European leaders who thought they had a deal.but it's also poised to hurt American consumers who are running up auto loan debt on increasingly expensive vehicles and may lose access to the few remaining affordable models if manufacturers pull them off the market.Trump's tariffs are also perversely creating opportunities for Chinese automakers who are moving into Canada to fill the gap that's created.Now, we've talked about some of this stuff in the podcast before, but it's laid out here, and I think in pretty basic terms for us to understand.It goes on to say, claiming the European Union is not complying with our fully agreed to trade deal, Trump says he's going to increase tariffs charged to European Union cars and trucks by 25%, up to 25%.Now they responded, as you might expect.

I've been concerned, and I've talked about this on the podcast over the last year or two, Then I was very upset and disappointed in the way that the European Union and Great Britain and others have responded to Trump's bullying and tactics, just kind of caving in.Even the European Union, remember that he met with with Ursula von der Leyen about a year or so ago, and after about a half hour meeting says, we've got a deal.It takes months to negotiate trade deals, but he says he had a deal.So and part of that, I guess, was the tariff that they had agreed to at that time.But as J .D.

comments in his article here, European Commission President Ursula von der Leyen has pointed to that breach of Trump's part.And she commented, a deal is a deal.And we want from this work mutual gain, cooperation and reliability.And we are prepared for every scenario.The implication here, of course, is that the European Union is disinclined to accept this change without some sort of a fight.Well, it's about time that they started standing up to Donald Trump.

The prospect of a renewed and escalated trade war between European nations and the U .S.is pretty grim for consumers, as he explains.American trade bearers have to navigate since they've raised the price not just of cars, but of parts imported for inclusion in U .S.assembled vehicles.

He's doing this for Canada, and it's interesting and I think important for us to realize that it's not just Canada that he's targeting here, it's other countries, including European nations about this.Foreign -based automakers have now warned Donald Trump administration that they're now looking at pulling their cheapest car models out of the U .S.market if the U .S.-Mexico -Canada agreement is not renewed or even watered down.

It's watered down to an extent where it's not effective anymore.Now, we've heard this from other automakers, by the way, including the Chinese.The deal that they set with the Canadian government was predicated on that this deal, this auto deal, the U .S.and Mexico deal, still being maintained.Trump wants to rip the whole thing up.

He doesn't even understand, or maybe he does, the implications of that.But now, these foreign -based automakers are saying, look it, if he's not going to play ball with us, and if he's just going to go back on his word all the time, we're not going to make those less expensive cars available to Americans.Just think about that for a second.Let me get into some of the numbers here, because I think he and the piece in The National Post, there's some rather alarming numbers here that I think we should be aware of and consumers should be aware of.The United States -Mexico -Canada Agreement, of course, the USMCA, KUSMA, we call it, was negotiated by Trump during his first term.It exempts parts made in Canada and Mexico from tariffs, right?

That was one of the big parts of the deal.And automakers have largely treated North America as a single market because of that, because it flows through without any trade barriers, Canada, United States and Mexico.It was mutually beneficial to all three countries and we could trade with other automakers, including European and Japanese automakers, South Korean automakers for that matter too, because they knew that this was going to work because there was no pressure from the tariff step.Well, that's all changed now.Okay, because now he wants to renegotiate the deal, the Kuzma, we've talked about that extensively in the podcast, with leaving carmakers with plants scattered across three countries, feeling a lot like the European officials and dealing with the U .S.

So now they're saying, look, We're not going to do this anymore.We're not going to capitulate to Donald Trump.And what now is going to happen is automakers are simply going to stop offering these affordable and less profitable vehicle models because the cost of meeting Trump's rules is becoming more and more onerous to these automakers.So they're willing right now to simply say, forget about it.We're not going to make those affordable cars available to American buyers anymore.Just think about that.

And how do you put yourself for a second in the spot of the consumer?Let's face it, we're consumers.Most of us, anyway, a lot of us buy automobiles in some way, shape, or form, whatever it might be, cars, trucks, whatever the case might be, SUVs.Now, as the Wall Street Journal has pointed out in this piece, the average price of a new car in the United States right now is around $50 ,000.Some more, some less, obviously.But affordable models made wholly or in part overseas come in at roughly half that amount.

So in other words, yeah, if you want an American -made car, quote unquote, to use Trump's language, it could cost you upwards of 50 grand and then up from there.But you can find one a lot less expensively, but it's usually made offshore in either Japan, South Korea, or certainly, of course, in Europe.Now he's talking about increasing the tariffs.What's that gonna do to the consumer?Well, at the end of 2025, the Century Foundation has said that the average origination balance for an auto loan reached $33 ,500.That's about $10 ,000 higher than it was even back in 2018.

Now that's the nuts and bolts.That's what you and I are dealing with.How much, unless you have money to slap down and pay cash for a car, and most of us don't, let's be honest about that, then you gotta take out a loan.Yes, interest rates are low right now, but the cost of the vehicle has gone up.Average loan for a car, for a car was $33 ,000.I know some of you listening and watching this right now may think, gee, I remember when mortgages, my dad's mortgage was only 33 ,000.

Now that's the loan, okay, for a car.Well, we all know about attrition with loans and payments that are going up and up and up as a result of that.So as they said for this,Foundation, reports suggest that with balances so high, borrowers are now turning to extended length auto loans of seven or eight or even nine years.Seven or eight or nine years extending those payments over that much time so that the monthly payments can be affordable.Well, here's the problem with that.

First of all, it's debt, okay?I saw one of the clowns in the Trump administration, you know, applauding the fact that, you know, Canadians and Americans especially, he says, you know, our economy is great because look at all the money that people are spending on credit cards.That's money they don't have.If you're putting it on the credit card, it's because you don't have cash.Okay.All right.

And that's debt.That's future debt.Credit cards are future debt.Car loans are future debt.So it's not a good deal, and it's not good for the economy when that's happening.And if somebody has to have an eight or nine year car loan so that they can make the monthly payments more affordable, what happens?

You just hope that that model is going to last eight or 10 years until the whole thing is paid off.Because if it's not, Just take a scenario, because I've heard of this happening, and I'm sure we've all experienced this at one time or another.If the vehicle that you buy doesn't last that long, seven years maybe, and you think, OK, I've got to get rid of it.I've got to get something else.You are still responsible for the balance of that loan.So when you go to buy another vehicle, if there's still another $4 ,000, $5 ,000, $10 ,000 left on that loan, that gets tacked on.

So you're going to be eternally in debt.People are becoming car poor.You know, we've heard the example over the last number of years about being mortgage poor.In other words, you're spending so much of your disposable, your take -home pay, on debt.whether it's a mortgage, now it's a car that people have no more money to spend on anything else.They have things like groceries, for instance.

It's only increasing the debt of the average American consumer, and we're seeing that happen here too.But the warning here in this article is that this is really driving the auto industry tothe precipice here, where people are simply going to say, I can't afford a vehicle anymore, or they can't afford it because of the debt, or they won't even qualify for it.That's what's happening here.This isn't going to say, well, OK, but is that really Trump's fault?Yeah, it is.

Tariffs represent a significant share of the increased cost of those automobiles.According to the Kelley Blue Book, I'm sure if you've ever bought a car, you at least glance at the Kelley Blue Book.It's kind of the Bible, the go -to source for vehicle evaluations, right?And they say that the Trump administration duties, in other words, the tariffs, increase car prices by as much as $6 ,000 on a $40 ,000 vehicle.So you buy a car in the United States, and wherever you are, Detroit, wherever it may be, say the sticker price on it is $40 ,000.$6 ,000 of that is the tariff, which, by the way, is another reminder that you, the consumer, pay the tariff.

It's not the company over in Europe that made the car that pays the tariff.It's you.the consumer that simply gets passed on to you.$6 ,000 of that $40 ,000.And of course, it's on a scale.So the more money you pay, the more the tariff is.

And that's the burden that Canadian and American consumers, especially now, American consumers are starting to face.It's problematic.And this is all caused by Donald Trump and his idiotic tariff war.And it's also created another situation that we're seeing here in Canada now where As Donald Trump tries to suck the lifeblood out of the Canadian side of the auto industry, there's a void.Well, the Chinese are filling that void, not just in Canada.They've moved into other markets in Australia and other countries where these sorts of things have happened before.

The Chinese are taking advantage of this opportunity in Canada, of course, because we're concerned about what's going to be happening to the auto industry.And no, we have Stilettos and others that are pulling out.of here now because of the bullying that's going on from Trump.And we're looking at bringing in the Chinese deals now.Of course, we've talked about the Chinese EVs that are going to come in here.And I know, I know, we've talked about the concerns about public safety and about security and all of these sorts of things.

I get that.But on the other hand, from a consumer standpoint here in Canada, they're going to be less expensive.And if you're a consumer and you're cash strapped and you're in debt up to your eyeballs, having to get a vehicle that you know is going to be a lot less expensive, you don't care if it comes from China or wherever, as long as you can afford it, right?And that's the way the consumers are looking at this right now.That wouldn't have happened.The deal was the deal.

And if Trump had adhered to the deal that he signed in his first term, none of this probably would have happened.I don't know that the Americans would be so upset with the Chinese government that they would have demanded that our government impose tariffs on Chinese goods.But they did, and we did, and we saw the fallout from that.And as a result, the part of the deal was, okay, we have to talk about the Chinese EVs because they want to come into the North American market.And I know some Americans who are watching this right now are saying, well, yeah, but we don't want those Chinese vehicles in America.Don't discredit and don't discount the fact that that's gonna come up during the negotiations.

Donald Trump is easily manipulated.Just tell him how wonderful he is and he just rolls over like a cat and says, rub my tummy.The Chinese EVs, they still want to get into the American market.Don't kid yourself for a second.And there could be some discussions, not publicly yet, about Chinese EVs trying to make their way into the American market.So it's something that we need to be aware of.

And it's going to be happening here in Canada.And part of the reason for all of these things that have happened over the last 18 months now are because of Donald Trump reneging on his deal.We had a pact that was agreed upon by all three countries, and it was working.And he just ripped it up, and he's doing the same thing to the European Union.And at some point, it kind of looks like now, the European Union is standing up and saying, no, we're not going to take this anymore.Not taking your crap anymore.

We're going to respond, just like Canada did.You know, we were all alone in the world right now when we had retaliatory tariffs.And we started talking about, well, taking liquor off the shelves here and not buying U .S.goods and not visiting you outside on our vacation time.And people were saying, how could you possibly do that?

Because you reach a limit.where you simply say, I'm not taking this crap anymore.And we've done that.And I congratulate our government.I congratulate Prime Minister Carney for having the courage to be able to do that in light of all the criticism he's going to be facing.And now it's less and less criticism.

And now we're starting to see other jurisdictions, including the European Union, starting to say, you know what?We're in the same boat.We're not going to take this crap from Donald Trump anymore.And it's a tragic circumstance.And the consumers are the ones who are ultimately the losers in this.And I appreciate the article that was in the National Post, because I think it lays everything out for us.

And it's an easily understood problem here.And it comes down to one sentence, as Mr. Chasseel finishes off on the article that was in the National Post.And it's the takeaway that we all need to get from what happens with this Trump administration.And it's quite simply this.Protectionism is not helping the United States.It's making Americans poorer and more isolated.

And the ripple effects of that are being felt right around the world, including here in Canada.That's it for this edition of the podcast.Thanks so much for being with us.If you like what we're doing, please just share this with others and pass the word around so that we can include them in the dialogue and the information gathering and sharing that we're doing here on the podcast.Don't forgetby the way, about subscriptions.

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