Fuddily lud. Tariffs are expected to sour the car industry across the board, placing strain on US car manufacturing and the jobs of car technicians who produce them.
Volvo, which previously had plans to build its S60 sedan at its new Berkeley County campus, will have to set up a factory in China to build any cars it wants to sell in China.
“Now, we cannot export to China” because the S60 would be priced out of the market, Anders Gustafsson, Volvo’s head of U.S. operations, told the Detroit Bureau.“In this segment, you can’t raise prices because of competitiveness. China will have to build up its own plant. I need to find a substitute for the volumes” that would have gone to China.
Stored Parts, Stalled Productions
The Port of Charleston has reported record containerized cargo levels as automakers and others strategize for future supply chain needs that will likely be impacted by tariffs.
“Automotive is a very strategic, long-term sourcing industry and those companies will make strategic decisions over the course of time — nothing immediate,” said Jim Newsome, CEO of the State Ports Authority, told the Post and Courier.
Our Cincinnati auto garage can certainly relate. When we’re making repairs, we need parts on hand immediately. That way we can be sure you’ll be able to pick up your car at the end of the day as promised.
How Global Trade Disputes Affect Local Production
BMW too estimates that tariffs will cost its North Carolina plant $347 million this year, and $547 million next year if the trade war continues.
“Import tariffs on US products in China are critical for us because we export many X models (SUVs) from the U.S.,” Nicolas Peter, the automaker’s chief financial officer, told Automobilwoche, the German automotive website.
Exports reportedly plunged 35 percent in August and hit a five-year low the previous month. Year-over-year losses in September narrowed to 2.1 percent.
“The continuing international trade conflicts are aggravating the market situation and feeding uncertainty,” BMW said in September as it cut its annual profit guidance to below 8 percent for the first time since 2009.
So hopefully we all come to our senses soon. It’s a global world and trade wars benefit nobody. We repair cars in Cincinnati, but they come from all over the world, especially Europe. Local is global. That’s just the world we live in these days.