April 2, 2025 • 21 mins
Gary and Shannon dive into the latest tariff shake-up and what it means for your bank account. With expert insights from:
We’re unpacking President Trump’s newest auto and pharmaceutical tariffs—how they could drive up prices, disrupt supply chains, and reshape industries. Will your next car cost more? How will these policies ripple through global manufacturing?
Buckle up for a fast-paced, no-nonsense look at the economic puzzle shaping our future!
- Arthur Wheaton, Director of Labor Studies at Cornell University
- Brian Moody, Senior Editor at AutoTrader & Kelley Blue Book
We’re unpacking President Trump’s newest auto and pharmaceutical tariffs—how they could drive up prices, disrupt supply chains, and reshape industries. Will your next car cost more? How will these policies ripple through global manufacturing?
Buckle up for a fast-paced, no-nonsense look at the economic puzzle shaping our future!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
One day leftil Liberation Day. If you ask President Trump,
you know his infatuation with tariffs goes back to the
nineteen eighties when he said the word tariff is the
most beautiful word in the dictionary.
Speaker 2 (00:13):
He said it many times since then as well.
Speaker 3 (00:16):
Wall Street journalists reporting the President Trump has settled on
a plan for the latest batch of tariffs that are
expected this week, but he's not telling anybody what that
plan is.
Speaker 1 (00:26):
He has announced a twenty five percent tariff on all
cars not made in the US, but exempted auto parts
that comply with the US Mexico Canada agreement. To help
US boil it all down. What it means for the
labor industry, for the auto industry in this country is
Arthur Wheaton. He's the director of Labor Studies at Cornell.
(00:48):
Joins us now, Arthur, thank you so much for your
time this morning.
Speaker 4 (00:53):
My pleasure.
Speaker 2 (00:54):
Let's start with some of the basics.
Speaker 3 (00:55):
You wrote a book a long time ago, or at
least in an article where in the world to do
they come from? Speaking of today's cars, and that was
more than twenty years ago. We've talked a little bit
about sort of the outsourcing of parts of transmissions of engines.
When it comes to cars that are then assembled in
the United States, where do our American finger quotes American
(01:20):
cars come from these days?
Speaker 4 (01:23):
Well, the short answer is is there's no completely American car,
So they all have parts coming from all around the world.
And some of the most American content would be Tesla,
and that's because their two main manufacturing plants for the
US is here. But you're seeing almost half of all
(01:43):
the vehicles sold in the US come from outside of
the US.
Speaker 1 (01:47):
How does this affect the car companies who make the cars,
like Toyota parts or the vehicles here in the US.
Speaker 4 (01:58):
It's a twenty five percent tiara on all of the
vehicles coming from Japan from Toyota, and it's a twenty
five percent tariff down the road for all of the
auto parts that are sent to the United States to
go into the Toyota vehicles. And it's a twenty five
percent tariff for all of the other companies that build
(02:20):
outside the US. The tricky part here is the parts,
and those are going to be delayed by a month
until they can figure out exactly how to precisely account
for all the parts going back and forth across the borders.
Speaker 3 (02:33):
Transportation, car payments, truck payments, things like that are usually
the second largest portion of a household's budget.
Speaker 2 (02:42):
Is this going to be an issue?
Speaker 3 (02:43):
Are we going to see immediate impacts on people's household
budgets as a result of this.
Speaker 4 (02:50):
Absolutely, and there's almost no way to avoid it, because
you're going to see people's budgets get squeezed. For new
car prices, they're going to go up from the tariffs.
Used car prices are going to go up because you're
going to get priced out. For those that are just
barely able to make those payments. Add twenty five percent
on top of it, you won't be able to afford it.
Rental car prices are going to go up, your car
(03:12):
insurance is going to go up. All of those directly
associated with the tariffs that are supposed to start the third.
Speaker 5 (03:20):
I remember in the nineties my mom got a used car.
She loved it.
Speaker 1 (03:26):
It was used Alpha Romeo and she loved it because
you know, its Italian. But then something went wrong with
the car and you had to get the part from
Italy and it was expensive and it took forever. And
that was back when there was the push to buy
American for that. One of one of the major reasons
(03:47):
was for that alone, that you want your parts to
get here and to be reasonable. But since then, it
seems like there has been a globalized model that has developed.
If we're going to bring back parts being made in
the US, how long are we looking at And is
that even something that's feasible with the way that this
(04:08):
industry has diversified globally.
Speaker 4 (04:11):
Give enough money and enough time, yes, it's feasible you
could bring that back. But what you would need to
have is a long term, sustained tariff that people understand
what the rules are. It's when you keep going on again,
off again. No one wants to invest the billions of
dollars to build a new plant and have two or
three years for it to ramp up. If the next
(04:33):
president comes in eliminates the tariffs and you just wasted
a whole bunch of that money. So is it possible, yes?
Is it going to take time? Absolutely? So you're talking
about these plants can take three to five years to
build and get the first product out the door, and
by then Trump will no longer be president.
Speaker 3 (04:52):
Well, we've been fighting inflation and after the pandemic well,
let me rephrase this. During the pandemic, we saw a
lot of problems with the chokehold around supply chains, and
that impacted the auto industry pretty significantly during the pandemic.
Did we ever fully recover from that or we back
to where we were before twenty twenty We are.
Speaker 4 (05:14):
Just now getting back with inventory levels, at least in
the auto industry back up closer to what normal was.
So there's going to be a little bit of a
cushion before it hits US, but it was very disruptive
for the supply chain. And you're going to see the
same thing. Some of these parts going into that vehicle
go back and forth across the border three or four
(05:35):
times before the finished vehicle is sold, So you don't
just pay the tariff lunch, you pay it each time
it goes across the border. So it's going to be
a huge impact for all of those and most of
the vehicles in the US have at least twenty to
fifty percent foreign parts that go in coming from outside
the US.
Speaker 1 (05:54):
And then at what point do we talk about the
potential for a government bailout of the American car companies
if they are hit hard to the point of needing help, Well.
Speaker 4 (06:06):
We've done it more than once. We've done it at
least a few times. For what's now called Stilantis used
to be called Chrysler. They've been bailed out multiple times.
But I think for the most part, you have different
levels of pain. So Ford has eighty percent of their
vehicles made in the US. The parts are going to
become more expensive as they come back and forth across
(06:28):
but Stillantis has a lot of their content and gender motors.
Even more of their content susussible to US and Mexico.
So the best are Canada and Mexico. The best hope
is that they can negotiate some changes in what is
or what is not covered by the tariffs, and that
has been changing, so the USMCA, the NAFTA two point
(06:51):
zero that President Trump negotiated in this previous administration, If
they can maintain some of those conditions, it made less
some of the impact from US, Mexico and Canada. But
for right now, they're all on the hook.
Speaker 5 (07:05):
When you look at Asia, who needs who more?
Speaker 1 (07:08):
Do we need the parts that are made in Asia
at the cost that they're made there more? Or do
they need American consumers buying their vehicles and their parts more.
Speaker 4 (07:18):
I think it's a global dependence on each other. So
I think they need us and I think we need them.
But at some point in time, can China survive without
the US market? Yes? They got more than a billion,
four one hundred million people there, so yes, they have
their own market. Can the US survive on their own? Yes?
(07:38):
Will it cost us all more money, yes, but we
can get by on our own. But it's a whole
lot easier if we all work together.
Speaker 2 (07:47):
Art, great stuff. We really appreciate you taking time for
us today.
Speaker 4 (07:52):
Thank you, my pleasure.
Speaker 3 (07:53):
You bet Arthur Wheaton there again, Director of Labor Studies
at Cornell.
Speaker 2 (07:57):
You call them art, well, I hope that's why I
did it.
Speaker 1 (08:00):
At the end, I didn't know if you near him
because you called him Art like that's that's the next
level relation.
Speaker 5 (08:06):
I mean, I guess we Art. We talked to him.
You didn't call him Art right out of the gate.
Speaker 2 (08:09):
No, I waited. I warmed up right. I let him
think we were friends.
Speaker 1 (08:13):
He could be one of those guys who's only been
Arthur his whole life.
Speaker 3 (08:16):
Well, the article where we found him from Bloomberg, he
went by Art. Oh good, I'm so glad I didn't
break ice on that because I wanted to have him back.
But if you offended him and burn that bridge. As
we were saying goodbye. A little bit later in the show,
we're going to talk about the the A's, not the well,
(08:38):
the Sacramento A's and the drone that interrupted the games.
Speaker 1 (08:42):
Yes, so I saw pictures from that game, and it
looked very much like spring training, which is really cool.
It's the most expensive ticket, by the way, in Major
League Baseball right now. Oh really, because there's only fourteen
thousand seats.
Speaker 2 (08:55):
I get and it was packed. Yeah, I don't know
what I mean. That was opening night, but it was.
Speaker 1 (09:00):
It looked very cool. It's a great ballpark there in
West Sacramento. Hey, you like botox, you like Waygo V,
you like zep bound, you don't like cancer. These are
all drugs or active ingredients for these drugs that suppliers
are shipping now by air to the United States because
(09:21):
they're worried about tariffs on pharmaceuticals. EU medicine and pharmaceutical
product exports to the US totaled about ninety billion euro
about ninety seven billion dollars in twenty twenty three. Several
investors and analysts following this whole deal say that well
(09:41):
shares are already hurting, but there have actually been drug
makers taking the unusual steps of sending medicines by air
to the US just to get them here, just to
get them here before the liberation day tomorrow. To your
Headquartered drug makers told Reuters they're sending as much of
(10:03):
their medicines across the Atlantic as possible. They've been doing
over the past several weeks. They heard other pharmaceutical companies
are doing the same.
Speaker 3 (10:12):
So on Friday, Trump said that the specific tariffs when
it comes to pharmaceuticals would be coming soon. And part
of the issue that has driven the markets crazy over
these last few days and weeks is that there are
no specifics about all of this just I mean, literally
minutes ago. Caroline Levitt in the White House Press briefing said,
(10:33):
the President has decided on all of these He's just
not talent anybody yet.
Speaker 6 (10:37):
The President said last night he has made a decision
in a determination. I was with him in the Oval
Office earlier, and he is going to announce that decision tomorrow.
I don't want to get ahead of the president this
is obviously a very big day. He's with his trade
and tariff team right now perfecting it to make sure
this is a perfect deal for the American people and
the American worker, and you will all find out in
about twenty four hours from now.
Speaker 3 (10:58):
Yes, so about one o'clock I believe tomorrow is when
the President's expected to make these announcements.
Speaker 1 (11:03):
Pharmaceutical products have long been spared from trade wars due
to potential harms, right, we need those. But Trump's move
to increase tariffs on goods from China, including finished drugs
and raw ingredients, as well as the early round of
tariffs on goods like steel and bourbon, has raised the
expectations that medicines will join the list.
Speaker 3 (11:27):
I am it sounds a lot like the determination about
how we're going to do these auto tariffs as well,
whether it's the finished product or the ingredients, the main
ingredients in them, or both or both. Trump had previously
singled out Ireland specifically because apparently Ireland is home to
manufacturing plants for most of the world's top ten pharmaceutical companies.
Speaker 5 (11:50):
Yeah, who knew. I just learned that this morning.
Speaker 3 (11:55):
So again, the details of it still hidden. Somewhere deep
within the White House, and it turns out that President
Trump has scheduled a news conference tomorrow to get into
some of the details we had seen. For the most part,
another down day on Wall Street because of the uncertainty
that surrounds all of the all of the tariff decisions,
(12:17):
and in fact, the announcement, significantly I mentioned, comes at
one o'clock to one o'clock hour time, after the bell closes,
after the markets close on Wall Street.
Speaker 1 (12:27):
Coming up next, we touched on the auto industry and
the tariffs ahead for the auto industry. We're going to
be talking to a senior editor at Kelly Bluebook and
Auto Trader about what does this mean if you're in
the market for a car, maybe you've got a used
car on your hands. Is this a time to sell
and to buy because of the uncertainty.
Speaker 3 (12:46):
Well, we're already concerned about inflation. There's some speculation, maybe
some anxiety even about Liberation Day. When a bunch of
tariffs are supposed to be imposed on stuff that's imported
into the United States. One of those imports is going
to be the price of cars is going to go up.
I don't know how it couldn't joining us to talk
(13:08):
more about this. Brian Moody is senior editor at Auto
Trader in Kelly Bluebook. Brian, first of all, thanks for
taking time and help us try to untangle some of
what's about to happen to the economy.
Speaker 7 (13:20):
Yeah, of course, it's it's interesting the way this has
moved all of a sudden. The automotive space has more
new news than say the Hollywood Reporter.
Speaker 2 (13:29):
Well, listen, we don't.
Speaker 3 (13:32):
I think one of the issues about the tariffs is
people are having a hard time kind of wrapping our.
Speaker 1 (13:38):
Heads around, well, do we do we buy now because
we just don't know what's going to happen with the dealerships?
Do we sell our used cars now because or do
we wait because because those prices are going to go up?
Speaker 7 (13:50):
Right, the prices are going to go up. So here's
the main thing that I would say. If you're looking
for a used car, and for the purposes of this conversation,
when I say used, I mean a lightly used car
between five years old. If you're looking for a ten
thousand dollars car with one hundred thousand miles or whatever,
that's probably not going to change that much. It's the
lightly used cars that, by the way, we're already in
(14:10):
short supply because of the new cars that didn't get
made during the pandemic. So if that's you, as a
customer of a lightly used car, I would absolutely start
looking right now.
Speaker 3 (14:22):
When it comes to the price increases that we do
expect on imported cars with the ones that are I mean,
it's hard to even explain this, but predominantly foreign vehicles,
even though some of the parts may come from the
United States, those prices are going to go up.
Speaker 2 (14:39):
Is there a specific.
Speaker 3 (14:41):
Segment of the car industry that we'll see more of
an impact? Is it the higher price cars, the lower
price cars?
Speaker 7 (14:50):
You know what's hard to It's not going to go
by price, however, I say that, But what automakers may
do is look at their entire PORTFOLI and say, hey,
these inexpensive cars are built here in the US, and
these priceier cars are built outside. They can't just raise
prices on certain cars, not on the other They're going
to try to even it out, get suppliers to chip in,
(15:13):
but even it out across their model lines so that
there's less of a sticker shock. So, for example, an
economy car that costs twenty five thousand dollars simply can't
support a three thousand dollars price increase, right, But a
ninety thousand dollars pickup, if you add thirty five hundred
dollars to that price, that customer probably can support that.
And the other thing to remember is when we say
(15:35):
import and domestic, the truth is many brands that we
think of as imports, such as Honda, Nissan, Toyota, Mercedes Venz,
those companies build their cars in the US for the
most part. And on the other hand, a lot of
domestic brands, not all, but they build many of their
models outside the US, specifically Mexico or Canada.
Speaker 1 (15:56):
Do you see this global market? Ask you this question.
It's become a global market. It's not as easy to
say buy American anymore because of what you just mentioned.
A lot of the parts are coming from other places.
Do you see it being a situation where we could
bring parts manufacturing back to this country primarily for American
(16:20):
cars in our lifetime.
Speaker 7 (16:25):
It's possible, and some manufacturers are already doing that. For
we see Tesla as a model for that. They make
a lot of their cars in the US, and they
also have a battery and power train facility inside the US,
as does the Hyundai Motor Group. Hundai Motor Group solves
the brands Hyundai, Kia, and Genesis, and they just built
a new gigantic factory near Savannah, Georgia, but not only
(16:47):
will manufacture cars for three brands, but also have an
on site battery facility, So yes, that is possible. Nissan
has an engine plant in Tennessee that also services vehicles,
so yes, that's not uncommon.
Speaker 2 (17:03):
But we're hopefully.
Speaker 7 (17:04):
I mean, the whole goal of this is that you
see more of that, But you know, this is all
just speculation at the end of the day. Does any
of that mean lower prices for consumers even five years
from now? I really don't know.
Speaker 5 (17:17):
Is there a brand that you see faring better?
Speaker 7 (17:23):
A brand that has a diverse portfolio of cars made
in multiple places will probably do better. Of course, we
could say any brand where all the cars are made
inside the US would be great. But the truth is,
as you said before, parts come from their places. There
really is no such thing as a one hundred percent
inside the USA made car. So Tesla has lots of
(17:44):
cars that come from the US. They probably would be Okay, Rivian,
same thing. When you look at Nissan, they have a
large number of cars made inside the US, but also
some made outside the US. So those types of brands.
Toyota makes many of the cars they sell in the
US right here in the US.
Speaker 2 (18:03):
I want to ask you about Tesla specifically.
Speaker 3 (18:05):
Some critics of Elon Musk and the president have said
that this was a favor to Tesla because it, like
you said, does produce a lot of vehicles here in
the US. But don't they also have factories in other
parts of the world that specifically cater to those other
parts of the world.
Speaker 7 (18:22):
Yeah, and that's the way that they've been doing business.
So that's what's so odd about this is that for
decades we've been sort of helping to orchestrate a system
whereby manufacturers build where they sell. Now, they don't just
sell cars in the US. There's a good chance that
whatever car they sell in the US, they also sell
in Mexico and South America. It only makes sense to
(18:44):
centralize the location for building those cars for the purposes
of a scale and also just economics. So yes, while
one manufacturer like Bulbo or Tesla might make cars here
in the US, they also make them other places to
sell to those marks. And while it may advantage Tesla
to have a tariff that only goes toward cars coming
(19:07):
from outside the US, it would also advantage cars like
the Ford Mustang GT, certain versions of the Jeep Wrangler,
the Volkswagen ID four, as well as the Honda Odyssey,
Honda Ridgeline, and other vehicles like that. Anybody who builds
their cars inside the US. Kia is another one. It's
going to help them. It wouldn't just only help Tesla.
That would be silly.
Speaker 5 (19:28):
Brian, you drive a SOB.
Speaker 1 (19:29):
Any chance of the manual transmission making a comeback in
this country.
Speaker 7 (19:35):
Nobody cares about that.
Speaker 5 (19:37):
I totally do. I miss the manual transmission.
Speaker 7 (19:41):
I know, because you know what you missed from not
having a manual transmission. You you are required to be
so focused on what's happening right in front of you.
It's like you're forced to have a higher level of attention.
I think all of these self driving programs are going
to end up being harmful in the end.
Speaker 5 (20:00):
Yes.
Speaker 7 (20:01):
So, while I can brag that I got my daughter
to be embraced sobs and she has one of those too,
I fear I'm going to be one of the only
few people like that in my neighborhood for many years
to come.
Speaker 3 (20:13):
Well, Mike, both of my kids learned on the stick
and I can't. It's one of the greatest gifts I
think that my wife and I gave our kids is
the ability to drive a manual transmission.
Speaker 7 (20:25):
Yes, and it also I've noticed something in teaching kids
to drive, Like sometimes at work will have an intern
and they'll say, oh, well, I want how to drive
a stick shift, And when you teach them, they'll say
things like this, how does the car no one to
stop when you push in the clutch.
Speaker 4 (20:39):
And you're like, oh, my gosh, you know we got
a switch.
Speaker 2 (20:42):
Oh man, I have.
Speaker 7 (20:43):
A connection with the physical world, the way we turn
our bikes upside down and put dirt on there and
change the tires. They don't have that connection with the
girl they learned to drive on video games.
Speaker 5 (20:53):
Honestly, God, that's suppressing. Brian, Thank you.
Speaker 7 (21:00):
Thank you.
Speaker 3 (21:00):
Brian Moody, their senior editor at Auto Trader and Kelly
blue Book
One day leftil Liberation Day. If you ask President Trump,
you know his infatuation with tariffs goes back to the
nineteen eighties when he said the word tariff is the
most beautiful word in the dictionary.
Speaker 2 (00:13):
He said it many times since then as well.
Speaker 3 (00:16):
Wall Street journalists reporting the President Trump has settled on
a plan for the latest batch of tariffs that are
expected this week, but he's not telling anybody what that
plan is.
Speaker 1 (00:26):
He has announced a twenty five percent tariff on all
cars not made in the US, but exempted auto parts
that comply with the US Mexico Canada agreement. To help
US boil it all down. What it means for the
labor industry, for the auto industry in this country is
Arthur Wheaton. He's the director of Labor Studies at Cornell.
(00:48):
Joins us now, Arthur, thank you so much for your
time this morning.
Speaker 4 (00:53):
My pleasure.
Speaker 2 (00:54):
Let's start with some of the basics.
Speaker 3 (00:55):
You wrote a book a long time ago, or at
least in an article where in the world to do
they come from? Speaking of today's cars, and that was
more than twenty years ago. We've talked a little bit
about sort of the outsourcing of parts of transmissions of engines.
When it comes to cars that are then assembled in
the United States, where do our American finger quotes American
(01:20):
cars come from these days?
Speaker 4 (01:23):
Well, the short answer is is there's no completely American car,
So they all have parts coming from all around the world.
And some of the most American content would be Tesla,
and that's because their two main manufacturing plants for the
US is here. But you're seeing almost half of all
(01:43):
the vehicles sold in the US come from outside of
the US.
Speaker 1 (01:47):
How does this affect the car companies who make the cars,
like Toyota parts or the vehicles here in the US.
Speaker 4 (01:58):
It's a twenty five percent tiara on all of the
vehicles coming from Japan from Toyota, and it's a twenty
five percent tariff down the road for all of the
auto parts that are sent to the United States to
go into the Toyota vehicles. And it's a twenty five
percent tariff for all of the other companies that build
(02:20):
outside the US. The tricky part here is the parts,
and those are going to be delayed by a month
until they can figure out exactly how to precisely account
for all the parts going back and forth across the borders.
Speaker 3 (02:33):
Transportation, car payments, truck payments, things like that are usually
the second largest portion of a household's budget.
Speaker 2 (02:42):
Is this going to be an issue?
Speaker 3 (02:43):
Are we going to see immediate impacts on people's household
budgets as a result of this.
Speaker 4 (02:50):
Absolutely, and there's almost no way to avoid it, because
you're going to see people's budgets get squeezed. For new
car prices, they're going to go up from the tariffs.
Used car prices are going to go up because you're
going to get priced out. For those that are just
barely able to make those payments. Add twenty five percent
on top of it, you won't be able to afford it.
Rental car prices are going to go up, your car
(03:12):
insurance is going to go up. All of those directly
associated with the tariffs that are supposed to start the third.
Speaker 5 (03:20):
I remember in the nineties my mom got a used car.
She loved it.
Speaker 1 (03:26):
It was used Alpha Romeo and she loved it because
you know, its Italian. But then something went wrong with
the car and you had to get the part from
Italy and it was expensive and it took forever. And
that was back when there was the push to buy
American for that. One of one of the major reasons
(03:47):
was for that alone, that you want your parts to
get here and to be reasonable. But since then, it
seems like there has been a globalized model that has developed.
If we're going to bring back parts being made in
the US, how long are we looking at And is
that even something that's feasible with the way that this
(04:08):
industry has diversified globally.
Speaker 4 (04:11):
Give enough money and enough time, yes, it's feasible you
could bring that back. But what you would need to
have is a long term, sustained tariff that people understand
what the rules are. It's when you keep going on again,
off again. No one wants to invest the billions of
dollars to build a new plant and have two or
three years for it to ramp up. If the next
(04:33):
president comes in eliminates the tariffs and you just wasted
a whole bunch of that money. So is it possible, yes?
Is it going to take time? Absolutely? So you're talking
about these plants can take three to five years to
build and get the first product out the door, and
by then Trump will no longer be president.
Speaker 3 (04:52):
Well, we've been fighting inflation and after the pandemic well,
let me rephrase this. During the pandemic, we saw a
lot of problems with the chokehold around supply chains, and
that impacted the auto industry pretty significantly during the pandemic.
Did we ever fully recover from that or we back
to where we were before twenty twenty We are.
Speaker 4 (05:14):
Just now getting back with inventory levels, at least in
the auto industry back up closer to what normal was.
So there's going to be a little bit of a
cushion before it hits US, but it was very disruptive
for the supply chain. And you're going to see the
same thing. Some of these parts going into that vehicle
go back and forth across the border three or four
(05:35):
times before the finished vehicle is sold, So you don't
just pay the tariff lunch, you pay it each time
it goes across the border. So it's going to be
a huge impact for all of those and most of
the vehicles in the US have at least twenty to
fifty percent foreign parts that go in coming from outside
the US.
Speaker 1 (05:54):
And then at what point do we talk about the
potential for a government bailout of the American car companies
if they are hit hard to the point of needing help, Well.
Speaker 4 (06:06):
We've done it more than once. We've done it at
least a few times. For what's now called Stilantis used
to be called Chrysler. They've been bailed out multiple times.
But I think for the most part, you have different
levels of pain. So Ford has eighty percent of their
vehicles made in the US. The parts are going to
become more expensive as they come back and forth across
(06:28):
but Stillantis has a lot of their content and gender motors.
Even more of their content susussible to US and Mexico.
So the best are Canada and Mexico. The best hope
is that they can negotiate some changes in what is
or what is not covered by the tariffs, and that
has been changing, so the USMCA, the NAFTA two point
(06:51):
zero that President Trump negotiated in this previous administration, If
they can maintain some of those conditions, it made less
some of the impact from US, Mexico and Canada. But
for right now, they're all on the hook.
Speaker 5 (07:05):
When you look at Asia, who needs who more?
Speaker 1 (07:08):
Do we need the parts that are made in Asia
at the cost that they're made there more? Or do
they need American consumers buying their vehicles and their parts more.
Speaker 4 (07:18):
I think it's a global dependence on each other. So
I think they need us and I think we need them.
But at some point in time, can China survive without
the US market? Yes? They got more than a billion,
four one hundred million people there, so yes, they have
their own market. Can the US survive on their own? Yes?
(07:38):
Will it cost us all more money, yes, but we
can get by on our own. But it's a whole
lot easier if we all work together.
Speaker 2 (07:47):
Art, great stuff. We really appreciate you taking time for
us today.
Speaker 4 (07:52):
Thank you, my pleasure.
Speaker 3 (07:53):
You bet Arthur Wheaton there again, Director of Labor Studies
at Cornell.
Speaker 2 (07:57):
You call them art, well, I hope that's why I
did it.
Speaker 1 (08:00):
At the end, I didn't know if you near him
because you called him Art like that's that's the next
level relation.
Speaker 5 (08:06):
I mean, I guess we Art. We talked to him.
You didn't call him Art right out of the gate.
Speaker 2 (08:09):
No, I waited. I warmed up right. I let him
think we were friends.
Speaker 1 (08:13):
He could be one of those guys who's only been
Arthur his whole life.
Speaker 3 (08:16):
Well, the article where we found him from Bloomberg, he
went by Art. Oh good, I'm so glad I didn't
break ice on that because I wanted to have him back.
But if you offended him and burn that bridge. As
we were saying goodbye. A little bit later in the show,
we're going to talk about the the A's, not the well,
(08:38):
the Sacramento A's and the drone that interrupted the games.
Speaker 1 (08:42):
Yes, so I saw pictures from that game, and it
looked very much like spring training, which is really cool.
It's the most expensive ticket, by the way, in Major
League Baseball right now. Oh really, because there's only fourteen
thousand seats.
Speaker 2 (08:55):
I get and it was packed. Yeah, I don't know
what I mean. That was opening night, but it was.
Speaker 1 (09:00):
It looked very cool. It's a great ballpark there in
West Sacramento. Hey, you like botox, you like Waygo V,
you like zep bound, you don't like cancer. These are
all drugs or active ingredients for these drugs that suppliers
are shipping now by air to the United States because
(09:21):
they're worried about tariffs on pharmaceuticals. EU medicine and pharmaceutical
product exports to the US totaled about ninety billion euro
about ninety seven billion dollars in twenty twenty three. Several
investors and analysts following this whole deal say that well
(09:41):
shares are already hurting, but there have actually been drug
makers taking the unusual steps of sending medicines by air
to the US just to get them here, just to
get them here before the liberation day tomorrow. To your
Headquartered drug makers told Reuters they're sending as much of
(10:03):
their medicines across the Atlantic as possible. They've been doing
over the past several weeks. They heard other pharmaceutical companies
are doing the same.
Speaker 3 (10:12):
So on Friday, Trump said that the specific tariffs when
it comes to pharmaceuticals would be coming soon. And part
of the issue that has driven the markets crazy over
these last few days and weeks is that there are
no specifics about all of this just I mean, literally
minutes ago. Caroline Levitt in the White House Press briefing said,
(10:33):
the President has decided on all of these He's just
not talent anybody yet.
Speaker 6 (10:37):
The President said last night he has made a decision
in a determination. I was with him in the Oval
Office earlier, and he is going to announce that decision tomorrow.
I don't want to get ahead of the president this
is obviously a very big day. He's with his trade
and tariff team right now perfecting it to make sure
this is a perfect deal for the American people and
the American worker, and you will all find out in
about twenty four hours from now.
Speaker 3 (10:58):
Yes, so about one o'clock I believe tomorrow is when
the President's expected to make these announcements.
Speaker 1 (11:03):
Pharmaceutical products have long been spared from trade wars due
to potential harms, right, we need those. But Trump's move
to increase tariffs on goods from China, including finished drugs
and raw ingredients, as well as the early round of
tariffs on goods like steel and bourbon, has raised the
expectations that medicines will join the list.
Speaker 3 (11:27):
I am it sounds a lot like the determination about
how we're going to do these auto tariffs as well,
whether it's the finished product or the ingredients, the main
ingredients in them, or both or both. Trump had previously
singled out Ireland specifically because apparently Ireland is home to
manufacturing plants for most of the world's top ten pharmaceutical companies.
Speaker 5 (11:50):
Yeah, who knew. I just learned that this morning.
Speaker 3 (11:55):
So again, the details of it still hidden. Somewhere deep
within the White House, and it turns out that President
Trump has scheduled a news conference tomorrow to get into
some of the details we had seen. For the most part,
another down day on Wall Street because of the uncertainty
that surrounds all of the all of the tariff decisions,
(12:17):
and in fact, the announcement, significantly I mentioned, comes at
one o'clock to one o'clock hour time, after the bell closes,
after the markets close on Wall Street.
Speaker 1 (12:27):
Coming up next, we touched on the auto industry and
the tariffs ahead for the auto industry. We're going to
be talking to a senior editor at Kelly Bluebook and
Auto Trader about what does this mean if you're in
the market for a car, maybe you've got a used
car on your hands. Is this a time to sell
and to buy because of the uncertainty.
Speaker 3 (12:46):
Well, we're already concerned about inflation. There's some speculation, maybe
some anxiety even about Liberation Day. When a bunch of
tariffs are supposed to be imposed on stuff that's imported
into the United States. One of those imports is going
to be the price of cars is going to go up.
I don't know how it couldn't joining us to talk
(13:08):
more about this. Brian Moody is senior editor at Auto
Trader in Kelly Bluebook. Brian, first of all, thanks for
taking time and help us try to untangle some of
what's about to happen to the economy.
Speaker 7 (13:20):
Yeah, of course, it's it's interesting the way this has
moved all of a sudden. The automotive space has more
new news than say the Hollywood Reporter.
Speaker 2 (13:29):
Well, listen, we don't.
Speaker 3 (13:32):
I think one of the issues about the tariffs is
people are having a hard time kind of wrapping our.
Speaker 1 (13:38):
Heads around, well, do we do we buy now because
we just don't know what's going to happen with the dealerships?
Do we sell our used cars now because or do
we wait because because those prices are going to go up?
Speaker 7 (13:50):
Right, the prices are going to go up. So here's
the main thing that I would say. If you're looking
for a used car, and for the purposes of this conversation,
when I say used, I mean a lightly used car
between five years old. If you're looking for a ten
thousand dollars car with one hundred thousand miles or whatever,
that's probably not going to change that much. It's the
lightly used cars that, by the way, we're already in
(14:10):
short supply because of the new cars that didn't get
made during the pandemic. So if that's you, as a
customer of a lightly used car, I would absolutely start
looking right now.
Speaker 3 (14:22):
When it comes to the price increases that we do
expect on imported cars with the ones that are I mean,
it's hard to even explain this, but predominantly foreign vehicles,
even though some of the parts may come from the
United States, those prices are going to go up.
Speaker 2 (14:39):
Is there a specific.
Speaker 3 (14:41):
Segment of the car industry that we'll see more of
an impact? Is it the higher price cars, the lower
price cars?
Speaker 7 (14:50):
You know what's hard to It's not going to go
by price, however, I say that, But what automakers may
do is look at their entire PORTFOLI and say, hey,
these inexpensive cars are built here in the US, and
these priceier cars are built outside. They can't just raise
prices on certain cars, not on the other They're going
to try to even it out, get suppliers to chip in,
(15:13):
but even it out across their model lines so that
there's less of a sticker shock. So, for example, an
economy car that costs twenty five thousand dollars simply can't
support a three thousand dollars price increase, right, But a
ninety thousand dollars pickup, if you add thirty five hundred
dollars to that price, that customer probably can support that.
And the other thing to remember is when we say
(15:35):
import and domestic, the truth is many brands that we
think of as imports, such as Honda, Nissan, Toyota, Mercedes Venz,
those companies build their cars in the US for the
most part. And on the other hand, a lot of
domestic brands, not all, but they build many of their
models outside the US, specifically Mexico or Canada.
Speaker 1 (15:56):
Do you see this global market? Ask you this question.
It's become a global market. It's not as easy to
say buy American anymore because of what you just mentioned.
A lot of the parts are coming from other places.
Do you see it being a situation where we could
bring parts manufacturing back to this country primarily for American
(16:20):
cars in our lifetime.
Speaker 7 (16:25):
It's possible, and some manufacturers are already doing that. For
we see Tesla as a model for that. They make
a lot of their cars in the US, and they
also have a battery and power train facility inside the US,
as does the Hyundai Motor Group. Hundai Motor Group solves
the brands Hyundai, Kia, and Genesis, and they just built
a new gigantic factory near Savannah, Georgia, but not only
(16:47):
will manufacture cars for three brands, but also have an
on site battery facility, So yes, that is possible. Nissan
has an engine plant in Tennessee that also services vehicles,
so yes, that's not uncommon.
Speaker 2 (17:03):
But we're hopefully.
Speaker 7 (17:04):
I mean, the whole goal of this is that you
see more of that, But you know, this is all
just speculation at the end of the day. Does any
of that mean lower prices for consumers even five years
from now? I really don't know.
Speaker 5 (17:17):
Is there a brand that you see faring better?
Speaker 7 (17:23):
A brand that has a diverse portfolio of cars made
in multiple places will probably do better. Of course, we
could say any brand where all the cars are made
inside the US would be great. But the truth is,
as you said before, parts come from their places. There
really is no such thing as a one hundred percent
inside the USA made car. So Tesla has lots of
(17:44):
cars that come from the US. They probably would be Okay, Rivian,
same thing. When you look at Nissan, they have a
large number of cars made inside the US, but also
some made outside the US. So those types of brands.
Toyota makes many of the cars they sell in the
US right here in the US.
Speaker 2 (18:03):
I want to ask you about Tesla specifically.
Speaker 3 (18:05):
Some critics of Elon Musk and the president have said
that this was a favor to Tesla because it, like
you said, does produce a lot of vehicles here in
the US. But don't they also have factories in other
parts of the world that specifically cater to those other
parts of the world.
Speaker 7 (18:22):
Yeah, and that's the way that they've been doing business.
So that's what's so odd about this is that for
decades we've been sort of helping to orchestrate a system
whereby manufacturers build where they sell. Now, they don't just
sell cars in the US. There's a good chance that
whatever car they sell in the US, they also sell
in Mexico and South America. It only makes sense to
(18:44):
centralize the location for building those cars for the purposes
of a scale and also just economics. So yes, while
one manufacturer like Bulbo or Tesla might make cars here
in the US, they also make them other places to
sell to those marks. And while it may advantage Tesla
to have a tariff that only goes toward cars coming
(19:07):
from outside the US, it would also advantage cars like
the Ford Mustang GT, certain versions of the Jeep Wrangler,
the Volkswagen ID four, as well as the Honda Odyssey,
Honda Ridgeline, and other vehicles like that. Anybody who builds
their cars inside the US. Kia is another one. It's
going to help them. It wouldn't just only help Tesla.
That would be silly.
Speaker 5 (19:28):
Brian, you drive a SOB.
Speaker 1 (19:29):
Any chance of the manual transmission making a comeback in
this country.
Speaker 7 (19:35):
Nobody cares about that.
Speaker 5 (19:37):
I totally do. I miss the manual transmission.
Speaker 7 (19:41):
I know, because you know what you missed from not
having a manual transmission. You you are required to be
so focused on what's happening right in front of you.
It's like you're forced to have a higher level of attention.
I think all of these self driving programs are going
to end up being harmful in the end.
Speaker 5 (20:00):
Yes.
Speaker 7 (20:01):
So, while I can brag that I got my daughter
to be embraced sobs and she has one of those too,
I fear I'm going to be one of the only
few people like that in my neighborhood for many years
to come.
Speaker 3 (20:13):
Well, Mike, both of my kids learned on the stick
and I can't. It's one of the greatest gifts I
think that my wife and I gave our kids is
the ability to drive a manual transmission.
Speaker 7 (20:25):
Yes, and it also I've noticed something in teaching kids
to drive, Like sometimes at work will have an intern
and they'll say, oh, well, I want how to drive
a stick shift, And when you teach them, they'll say
things like this, how does the car no one to
stop when you push in the clutch.
Speaker 4 (20:39):
And you're like, oh, my gosh, you know we got
a switch.
Speaker 2 (20:42):
Oh man, I have.
Speaker 7 (20:43):
A connection with the physical world, the way we turn
our bikes upside down and put dirt on there and
change the tires. They don't have that connection with the
girl they learned to drive on video games.
Speaker 5 (20:53):
Honestly, God, that's suppressing. Brian, Thank you.
Speaker 7 (21:00):
Thank you.
Speaker 3 (21:00):
Brian Moody, their senior editor at Auto Trader and Kelly
blue Book
Gary and Shannon News
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