Need a New Car? Buy it Now
My wife and I have always bought new cars in the summer, taking advantage of end-of-year sales on the current model year. This June we just traded in our 14-year-old Lexus SUV for a 2018 Mercedes Benz SUV. But the reason had much more to do with Trump’s trade wars than end-of-year sales.
At only 187,000 miles, we figured that the Lexus had another year of useful life. That was the reason that we selected this vehicle back in 2004. Quality of workmanship, excellent engineering, and a magnificent reliability record. But then Trump started his trade wars. Between his tariffs on steel and aluminum along with his threats to place tariffs on German vehicles, we feared that next year an SUV, either American-build or foreign, was going to cost us at least 20 percent more.
Make no mistake. Anyone who has taken Economics 101 knows that tariffs stifle the economy and damage growth in the manufacturing sector. Harley Davidson is a case in point. (Full disclosure: we ride a HD Road King Classic and have visited both the HD facilities in Milwaukee and the HD assembly plant in York, PA. Additionally, my wife has done consulting for the Machinists Union who represents HD hourly-wage workers and met with the C-level HD executives in Milwaukee, including the CEO.)
Harley Davidson has seen a severe market shift from the United States to the EU and southwest Asia, including Australia. They planned to close the assembly plant in Kansas City and move that production capacity to York. But once the Trump tariffs were announced the EU placed a tariff on American motorcycles, among other durable products, and HD calculated that between the steel tariffs and the EU import tariffs the cost of each motorcycle produced in the United States was going to rise by about $2,600. So, they are moving their production capacity that was planned for York to an overseas facility that will not be subject to the tariffs, about 600 union-wage manufacturing jobs lost to American workers.
Nice job, Donald. Too bad that you flunked out of Wharton after your first semester instead of getting an MBA. And now you are driving us into another Great Recession instead of Making America Great Again. Trump economics has the United States in a death spiral that neither the Republicans nor the Democrats, with their internecine primary warring, seem to be equipped to deal with.
Shortly after Trump was elected, I asked our financial advisor where I should invest. His answer was, “Non-perishable food and ammunition.”