- Matt Davis Reads the Newspaper So That You Don't Have To
- Posts
- Trump to Impose 25% Tax on Cars Shipped Into U.S
Trump to Impose 25% Tax on Cars Shipped Into U.S
Prices likely to climb
Matt Davis
March 27, 2025
Greetings to all newcomers! I read the top story in the New York Times every morning so that you don’t have to. If you were forwarded this, you can subscribe here. I’m also doing a five-minute video version of this, each morning at around 9 a.m. (depending on how long it takes me to read the newspaper). If you’d like to follow me on LinkedIn (you can always watch the recording later). If you subscribe to my Youtube channel it’ll also send you a notification when I’m “going live.”
The front page is dominated this morning by the leaked Signal chat between defense secretary Pete Hegseth and 18 other people. My favorite meme about this shows Elon Musk asking, “wait, you guys have a group chat?”. The transcript is also juxtaposed with Intelligence Director Tulsi Gabbard lying to congress when she was asked earlier this week whether precise operational issues were part of the conversation. As I said yesterday, people are gonna lose their jobs by next Tuesday. You know it’s gonna happen because Pete Buttigieg posted a video of himself in a flannel shirt having a hot take yesterday. Behind him on the bookshelf? Some military stuff, dude. Because he served in Afghanistaaaaaan.
That’s a tight top lip there, too, you notice? Like, angry! Angry pete in his flannel shirt! Rowrrrrr!
Just gonna leave this here.
Still, technically, the actual lead story is the one on the left, about the president trying to move the news cycle along a bit with yet another stupid idea imposing a 25% auto tariff on April 2, in an effort to stimulate more domestic production, which will literally have the opposite effect of, in fact, reducing domestic auto production by about 30% according to analysts. The bonus is it’ll tank your 401 (k) and also probably cause wider shocks to a fragile economy.
At least Trump didn’t send his Vice President off to Europe again (those “pathetic” Europeans, as he described them in the group chat) to try to reignite Nazism like he did earlier this year. Seriously the sickest part of this group chat? This: 👇🏻
It’s like they’re trying to outdo each other with their macho Christianity as they murder people. Given the history of Christians murdering Muslims in crusades abroad, it’s unfortunate rhetoric, to say the least. Hegseth sounds like he’s auditioning for a role in “Tropic Thunder” while J.D. Vance seems to be one-upping with the prayer thing. I sort of love how sinister that is. And the two “🙏” reactions?
Also, it’s Lent. Here’s something I READ ABOUT IN CHURCH WHERE I ONLY GO TO BE BETTER THAN OTHER PEOPLE AT LEAKING WAR PLANS, on Ash Wednesday:
“REMEMBER THAT YOU ARE DUST, AND TO DUST YOU SHALL RETURN,” should probably be the motto of the Trump administration at this point.
“Beware of practicing your piety before others in order to be seen by them,” eh?
Anyway. If you want to buy a car in America it’s about to get hella more expensive. Those of you who’ve seen “The Apprentice” will know that Donald Trump has three strategic communications rules. If only there were a strategic communications expert around here to break them down for us in more detail…
My sense is that by trying to reimpose the tariffs he recently U-turned on after crashing stock markets by 10%, Mr. Trump is seeking to go on the attack, here. The problem is that the Yemen story is not going away.
“The White House is in denial that this was not classified or sensitive data,” said Rep. Don Bacon (R-Neb.), a former Air Force brigadier general and member of the House Armed Services Committee, on Wednesday. “They should just own up to it and preserve credibility.”
A Republican congressman in Nebraska, eh? Good for you, Don “I have the best name for a congressman” Bacon. 🥓
Anyway seriously, guys. Let’s talk about these tariffs! Oh, poopy.
Stock markets fell on news that the auto tariffs would be imposed. Shares of major carmakers tumbled further in after-hours trading, after the White House clarified that the tariffs would also cover imported auto parts. General Motors was down nearly 7 percent and Ford and Stellantis were more than 4 percent lower after the markets closed. Tesla’s stock fell 1 percent in extended trading.
Here’s a cool thing I’ve learned to do…real-time stock values! Here’s the stock market generally: $SPX ( ▼ 5.98% ) . Here’s General Motors: $GM ( ▼ 3.75% ) . Ford: $F ( ▲ 0.42% ) . And Tesla $TSLA ( ▼ 10.42% ) .
You may notice Tesla was reportedly down less than all the others YESTERDAY, but that’s partly because its stock has plunged 28% this year to date already, thanks to memes like this, which, frankly, are deserved when you recall the Nazi salutes Mr. Musk did on inauguration day.
It’s subtle stuff, I realize. But the point this meme is making is that Elon Musk is an unapologetic Nazi and that if you buy one of his cars you support Nazism, too. That’s called “tanking your brand,” in a democracy where people can vote for alternatives and where newspapers can report on facts.
But the relative calm in Tesla’s stock price compared to the plummeting values for all the others (yesterday — it’s down more than 5% today…) is because Tesla gets a leg-up with the tariffs. Here’s Jack Ewing in a separate story on this angle this morning:
Tesla could be a winner from the auto tariffs announced by President Trump on Wednesday — or at least suffer less than its competitors.
Tesla, whose chief executive, Elon Musk, has taken a leading role in the Trump administration, makes all the cars that it sells in the United States in California and Texas. That means that Tesla vehicles will not be subject to tariffs, although the company will still see its production costs rise because of tariffs on imported parts.
You don’t think Donald Trump, backed into a corner, would just do something stupid and hugely destructive to move the narrative along a bit while simultaneously helping one of his allies out, do you? Like, you don’t think those are the instincts driving White House decision making right now, do you? Do you?
Mr. Trump argues that the tariffs will increase domestic auto production, but it’s not clear how fast he can accomplish that goal. Tariffs can encourage companies to use more products from the United States and expand production, but new factories typically take several years and can cost billions of dollars to construct.
The additional costs that tariffs will introduce could also backfire economically, harming the U.S. auto industry by squeezing its profits and slowing its sales.
You mean the benefits of this strategy won’t pay off for years and by then, Mr. Trump will have returned to the dust from whence we all came?
Let me be the first to “say a prayer for victory,” here.
One group that’s pleased about this news is the auto unions, who sound like they’ve been listening to a lot of Joe Rogan lately.
In a statement, the president of the United Auto Workers union, Shawn Fain, said the tariffs would “end the free-trade disaster that has devastated working class communities for decades.”
“Ending the race to the bottom in the auto industry starts with fixing our broken trade deals, and the Trump administration has made history with today’s actions,” he said.
You want to experience a real race to the bottom, Shawn? Drive an American-made car. Or, actually, join a Signal group with Pete Hegseth and JD Vance in it.
Aside from doing considerable harm to our trading partners, the chances are that this move will further prompt an American recession. You’ll recall we’ve been teetering on the brink of one since inauguration day although so far, so meh. But now, this:
Given the size and importance of the auto industry, the effect of the tariffs will cascade through the economy.
About one million Americans are employed by auto and parts manufacturers, according to the Bureau of Labor Statistics, and two million more are employed at dealers that sell cars and parts. And cars are often the single biggest purchase for American families, meaning that additional costs from tariffs could weigh heavily on consumers.
Although as we’ve noticed the administration isn’t inclined to take people’s ability to have jobs or afford things as important. The move is likely to choke off American auto production, too. Here’s a market analyst.
He estimated that U.S. factories would produce 20,000 fewer cars per week, or about 30 percent less than usual.
“By mid-April we expect disruption to virtually all North American vehicle production,” Mr. Smoke said Wednesday on a conference call with clients and reporters. “Bottom line: lower production, tighter supply and higher prices are around the corner.”
This is the definition of a 💩-show.
Thanks for reading the newspaper with me so that you don’t have to do it alone.
I appreciate you reading, sharing, and subscribing. This is a democracy and facts matter.
Or as JD Vance might say, “🙏.”
Matt Davis lives in Manhattan with his wife and child.