re: Car prices set to sky rocket after 25% tariff on Steel and 10% on Aluminium

Commerce decides the ADCVD rate not Trump.

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So now, all you "conservatives" are for trade protectionism?

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Absolutely not.

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So would you call that "crumbs"?

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You don't buy a car every two weeks so yes.

$200 is crumbs compared to $2600 - $4800.

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Over the 20 year life of a car? Yes. Those are crumbs.

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Robin Masters drives a 20 year old car.

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That's not world wide.

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No it's not worldwide. I'm referring to the United States, which is country we're discussing.

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You are making things up in your head. If the tariff is at 25%, we already know the fall out of prices.... as in what's being talked about in this thread.

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I'm basing it on the amount of steel we used domestically and exported. And then I added the remaining domestic market share, assuming we were to gain 100% of the US market, kept the exports constant, and that results in a 34% gain. So with 140,00 jobs, 34% more would be about 48,000 new jobs.

And that's assuming we were to have 100% of the domestic share, and didn't lose any exports, PLUS that increase resulted in the same increase in jobs. Neither of those are likely, so 48,000 is a very generous number.

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You are acting like there is no other purchase options. Like all of the sudden the only steel allowed is USA steel. That's FALSE! It's a 25% tariff. Still can purchase that steel.

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Assuming everybody buys from their previous supplier, and the only increase in costs of steel are from the taxes alone, then that's 8.25% increase in steel costs from the tax alone. The aluminum would add another 9% under the same assumptions.

So let's look at the impact on the costs of a vehicle.

Raw materials – the biggest cost driver in the auto industry

Approximately 22% of an automaker’s operational costs depend on steel. So, any fluctuation in global steel prices has a direct impact on profitability.

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Raw materials contribute about 47% to the cost of a vehicle. On average, an automobile is 47% steel, 8% iron, 8% plastic, 7% aluminum, and 3% glass. Other materials account for the remaining 27%.

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I couldn't find how much aluminum costs as a percentage, but this source cites an MIT study that says aluminum materials costs 3 times steel material costs. It's from 2007, and I think aluminum costs have risen more dramatically but 3 times seems reasonable, if low.
Aliumum compared to steel


So with 22% of the costs related to steel and that's an additional 1.82% of the automobile cost. And since 7% is aluminum, which is 3 times the cost of steel, and steel's 22% total costs were 47% of its 47% material share, that equates to about 9.8% additional costs for aluminum. And a total increase of about 11.6% in automobile costs.

So if $200 represents only the additional cost, then would indicate that an average automobile currently costs about $1,500 TOTAL for a company and that includes materials, labor, research, and advertisement.

So if that's the case, and new cars on average sell for over $33,500 (April 2017) then costs are only about 4.5% the final price. I couldn't find anything the cites the actual cost, but even if it was only $12,000 then the additional costs would add almost $1,400 to the cost.

So do you really think that with an 11%+ increase in the cost that that the prices will only have a 0.6% increase, and they'll instead absorb the 5.6% those costs cut into that margin, even given my generously low costs?

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the fake libertarian have his “gotcha”

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can someone please explain to me what a "gotcha" is? Someone referred to that earlier today and I'm not sure what they meant.

Are you that dumb? Do you realize the steel industry AND peripheral industries would boom and raise employment, wages, taxes, housing markets, etc etc etc etc etc
Your preschool economic breakdown leaves a lot to be desired.

But let me make sure I understand....you think we would be better off buying Toyota's made in Japan instead of making and selling Toyota's here in the states?

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Yes.

People spend more than that on their cell phone and plan per month

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Would Verizon like to have an additional 17,000,000 accounts this year?

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I'd say half the people that profess to be "conservative" have uncovered themselves as closet progs.

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For sure. It's ridiculous.