Steel and aluminium tariffs

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MichelT3

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#1
Today we are surprised by the news that Trump wants to instate import tariffs for steel and aluminium, of 25 and 10 %.
I want to keep this thread factual and to avoid a political discussion.

However, that announcement has already led to a (to be expected) respons by the EU (European Union), that instating a US-import tariff will lead to a EU counter-tariff for US products. Canada has announced a similar reaction.
If such a trade war will become reality, US cars are going to cost much more for us. Where Model 3 already will be almost 40 % more expensive.
For me and most (if not all non-US reservationists) that very probably will mean that Model 3 will become too expensive. If that's the case I won't be able to buy a Model 3.

A trade war will unavoidably diminish international trade. And lead to a sharp decline in sales of Tesla outside the US.
This makes me sad.

Let's use this thread for an exchange on facts on this subject.
 

MichelT3

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#2
Oh, an addition; a drop of non-US sales means a drop of 40 % of all sales.
 

AllaninAtlanta

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#3
I'd like to understand how this will add $20,000 to the cost of your car? I'm not doubting you but I'm wondering what type of import taxes you are expecting to see on US products that would push things that high?

I'm very curious to see what China has to say. They have been accused of significant unfair trade practices and I would have expected something targeted more directly at them. Protectionistic tarriffs like this really only do harm. If Trump had gone after Chinese imports, chip dumping, etc - I'd be in support because it would be leveling the playing field. But a blanked import on processed metal doesn't seem to make much sense on me.
 

garsh

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#4
Today we are surprised by the news that Trump wants to instate import tariffs for steel and aluminium, of 25 and 10 %.
I want to keep this thread factual and to avoid a political discussion.
This is going to be a fine thread to walk. Be careful people. I'll shut this down if it strays. o_O

One thing to keep in mind: before becoming president, Trump had a reputation as a strong and shrewd negotiator. To do so, he would always start off with a position of strength, then negotiate from that point. I believe that Trump's announcement is most likely just step one in a negotiating process with the rest of the world. Definitely keep an eye on things, but it's not time to panic yet.
 

MichelT3

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#5
I did the math based on prices of Model S like @TrevP did for Canadian prices for Model 3.
The option I would like costs $ 62,200, which leads to € 71,700 in The Netherlands. Including an exchange rate of 1.23 for the Euro, that means 39% more already.
If an import tariff will be added to that, the price of Model 3 will become ridiculous.
 

MichelT3

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#6
One thing to keep in mind: before becoming president, Trump had a reputation as a strong and shrewd negotiator. To do so, he would always start off with a position of strength, then negotiate from that point. I believe that Trump's announcement is most likely just step one in a negotiating process with the rest of the world. Definitely keep an eye on things, but it's not time to panic yet.
It seems you are balancing the line too. LOL

Just saying: Europeans and Chinese are no stupid negotiators either.
 

Michael Russo

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#7
Michel, I thought about it myself immediately & decided not to worry about it too much prematurely.
To your point, made early in your post, we don’t want this in any way to veer into political statements. I’ll be watching together with my buddy @garsh ... ;)

I do not object to an exchange on facts. However, I caution everyone to hold their breath consequently since there are not that many around for now. The announcement - I think is fair to say - seems to have taken many by surprise. It is not totally sure at this point what will actually make it into legislation...

You are correct in stating that, if quotes tariffs on steel & aluminum imports into the US, there is a significant risk of retaliation for trade partners like European countries. Harley-Davidson motorcycles, Levi’s jeans and Bourbon have been already quoted as examples of US exports that could see their EU prices drastically increase as a result of these retaliatory measures...

However, I would observe that the use of the conditional seems to be in order until further notice (see the repeated use of the word ‘could’ in this CNN article just posted :
Europe could hit Harleys, bourbon and Levi's over Trump's tariffs http://money.cnn.com/2018/03/02/news/economy/europe-steel-tariff-retaliation-trump/index.html)

My conclusion for now. Let’s stay cool.. And let’s not forget that we are probably close to a year - at least - before the start of European deliveries. We also are yet to learn how T≡SLA cars would be affected if final assembly takes place in EU, for Model 3 as it is done in Tilburg for S/X.

So... no facts yet... Take a deep breath and let’s hope things take a more positive turn than the pessimistic scenarii envisaged quickly. :)
 

MichelT3

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#8
I agree mostly @Michael Russo .
Yet the threat of a US tariff is a fact.
The immediate indignant answers by the EU and Canada are facts too.

I also immediately thought about what the effect of a EU-gigafactory could be.
Yet - as I posted elsewhere - such a factory won't be producing cars before 2022. Which is no solution for us.
 

AllaninAtlanta

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#9
I'm sorry, but I'm not following. I assume you are looking at the highest end possible Model 3 to get the price of $62,200 - lets call that the local US price. Because we have 50 states with their own rules and tax laws it will differ for everyone but I think for me I also have a 6% Sales tax and then about $100 registration so very close to $66,000 converted to EU at a (.81 rate) is 53,578EU. What taxes are you seeing that bring that up to 71.,700EU? And are those the existing import, sales, value added taxes? I know we all get taxed to death in different manners so I am not familiar with the Dutch taxes on anm automobile purchase. I'd like to understand how you get taxed on an US car purchase and then how that might get changed based on some sort of trade war.

I'm going to try to avoid the political conversation like everyone else but I do agree that Trump's statements and what gets enacted into law may be very different. He has a very different style than many politicians. Our legislative process here is slow and in most cases cooler heads prevail before something becomes law.
 

Michael Russo

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#10
I agree mostly @Michael Russo .
Yet the threat of a US tariff is a fact. The immediate indignant answers by the EU and Canada are facts too.

I also immediately thought about what the effect of a EU-gigafactory could be.
Yet - as I posted elsewhere - such a factory won't be producing cars before 2022. Which is no solution for us.
The threat is a fact, in the form of the impromptu announcement by Donald Trump. What it actually translates to, in view among other things of the integration of possible retaliation and the indirect effect on American consumers, remains to be seen.

Will close thread here
. It is probably best. I think what needed to be said was said, and any further discussion short term will take us to unwanted territories. Make no mistake, we are all conscious that some political decisions can and will affect our ability to purchase cars, or not; we just don't wish to discuss them here as they almost automatically imply irreconcilable expressions of different opinions which then becomes divisive to this big happy family that is M30C...
 
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