WEBVTT 1 00:00:00.600 --> 00:00:02.919 This is Gary and Shannon and you're listening to KFI 2 00:00:03.080 --> 00:00:05.839 AM six forty, the Gary and Shannon Show on demand 3 00:00:05.919 --> 00:00:12.480 on the iHeartRadio app One Day leftil Liberation Day. If 4 00:00:12.519 --> 00:00:16.719 you ask President Trump, you know his infatuation with tariffs 5 00:00:17.160 --> 00:00:19.399 goes back to the nineteen eighties when he said the 6 00:00:19.440 --> 00:00:22.719 word tariff is the most beautiful word in the dictionary. 7 00:00:22.839 --> 00:00:25.359 He said it many times since then as well. 8 00:00:26.000 --> 00:00:29.600 Wall Street journalists reporting the President Trump has settled on 9 00:00:29.679 --> 00:00:32.960 a plan for the latest batch of tariffs that are 10 00:00:32.960 --> 00:00:35.799 expected this week, but he's not telling anybody what that 11 00:00:35.880 --> 00:00:36.359 plan is. 12 00:00:36.560 --> 00:00:39.240 He has announced a twenty five percent tariff on all 13 00:00:39.359 --> 00:00:43.039 cars not made in the US, but exempted auto parts 14 00:00:43.039 --> 00:00:47.479 that comply with the US Mexico Canada agreement. To help 15 00:00:47.560 --> 00:00:50.039 us boil it all down. What it means for the 16 00:00:50.119 --> 00:00:54.520 labor industry, for the auto industry in this country is 17 00:00:54.679 --> 00:00:57.479 Arthur Wheaton. He's the director of Labor Studies at Cornell 18 00:00:57.840 --> 00:01:00.880 joins us Now, Arthur, thank you so much for your 19 00:01:00.920 --> 00:01:01.960 time this morning. 20 00:01:02.799 --> 00:01:03.479 My pleasure. 21 00:01:04.120 --> 00:01:06.079 Let's start with some of the basics. You wrote a 22 00:01:06.079 --> 00:01:08.159 book a long time ago, or at least in an article. 23 00:01:08.519 --> 00:01:11.040 Where in the world do they come from? Speaking of 24 00:01:11.120 --> 00:01:14.079 today's cars, and that was more than twenty years ago. 25 00:01:15.439 --> 00:01:18.480 We've talked a little bit about sort of the outsourcing 26 00:01:18.560 --> 00:01:22.840 of parts, of transmissions, of engines. When it comes to 27 00:01:22.920 --> 00:01:26.680 cars that are then assembled in the United States, where 28 00:01:26.680 --> 00:01:32.239 do our American finger quotes American cars come from these days? 29 00:01:33.319 --> 00:01:36.560 Well, the short answer is is there's no completely American car. 30 00:01:37.040 --> 00:01:40.560 So they all have parts coming from all around the world. 31 00:01:40.840 --> 00:01:44.840 And some of the most American content would be Tesla, 32 00:01:45.400 --> 00:01:48.840 and that's because their two main manufacturing plants for the 33 00:01:48.959 --> 00:01:53.319 US is here. But you're seeing almost half of all 34 00:01:53.319 --> 00:01:55.799 the vehicles sold in the US come from outside of 35 00:01:55.840 --> 00:01:56.680 the US. 36 00:01:57.519 --> 00:02:02.000 How does this affect the car companies who make the cars, 37 00:02:02.040 --> 00:02:06.159 like Toyota parts or the vehicles here in the US. 38 00:02:08.159 --> 00:02:10.400 It's a twenty five percent tariff on all of the 39 00:02:10.479 --> 00:02:14.439 vehicles coming from Japan from Toyota, and it's a twenty 40 00:02:14.479 --> 00:02:17.960 five percent tariff down the road for all of the 41 00:02:18.000 --> 00:02:21.560 auto parts that are sent to the United States to 42 00:02:21.599 --> 00:02:25.080 go into the Toyota vehicles. And it's a twenty five 43 00:02:25.080 --> 00:02:30.159 percent tariff for all of the other companies that build 44 00:02:30.199 --> 00:02:33.240 outside the US. The tricky part here is the parts 45 00:02:33.280 --> 00:02:35.159 and those are going to be delayed by a month 46 00:02:35.240 --> 00:02:38.960 until they can figure out exactly how to precisely account 47 00:02:38.960 --> 00:02:41.759 for all the parts going back and forth across the borders. 48 00:02:43.280 --> 00:02:47.199 Transportation, car payments, truck payments, things like that are usually 49 00:02:47.240 --> 00:02:50.919 the second largest portion of a household's budget. 50 00:02:52.319 --> 00:02:53.400 Is this going to be an issue? 51 00:02:53.400 --> 00:02:57.120 Are we going to see immediate impacts on people's household 52 00:02:57.159 --> 00:02:58.400 budgets as a result of this. 53 00:03:00.000 --> 00:03:02.840 Absolutely, and there's almost no way to avoid it, because 54 00:03:02.879 --> 00:03:06.520 you're going to see people's budgets get squeezed. For New 55 00:03:06.560 --> 00:03:08.800 car prices are going to go up from the tariffs. 56 00:03:09.199 --> 00:03:11.240 Used car prices are going to go up because you're 57 00:03:11.240 --> 00:03:13.680 going to get priced out. For those that are just 58 00:03:13.800 --> 00:03:17.000 barely able to make those payments. Add twenty five percent 59 00:03:17.039 --> 00:03:19.000 on top of it, you won't be able to afford it. 60 00:03:19.599 --> 00:03:22.159 Rental car prices are going to go up, Your car 61 00:03:22.199 --> 00:03:25.000 insurance is going to go up. All of those directly 62 00:03:25.080 --> 00:03:30.039 associated with the tariffs that are supposed to start the third. 63 00:03:30.599 --> 00:03:34.439 I remember in the nineties, my mom. 64 00:03:34.280 --> 00:03:36.319 Got a used car. She loved it. 65 00:03:36.319 --> 00:03:40.639 It was used Alpha Romeo, and she loved it because 66 00:03:40.759 --> 00:03:43.639 you know, its Italian. But then something went wrong with 67 00:03:43.680 --> 00:03:46.840 the car and you had to get the part from Italy, 68 00:03:47.080 --> 00:03:50.479 and it was expensive and it took forever. And that 69 00:03:50.680 --> 00:03:53.639 was back when there was the push to buy American 70 00:03:53.759 --> 00:03:57.080 for that. One of one of the major reasons was 71 00:03:57.120 --> 00:04:00.639 for that alone, that you want your parts to get 72 00:04:00.639 --> 00:04:03.800 here and to be reasonable. But since then, it seems 73 00:04:03.919 --> 00:04:07.800 like there has been a globalized model that has developed. 74 00:04:07.840 --> 00:04:11.000 If we're going to bring back parts being made in 75 00:04:11.039 --> 00:04:14.240 the US, how long are we looking at and is 76 00:04:14.280 --> 00:04:17.360 that even something that's feasible with the way that this 77 00:04:18.040 --> 00:04:20.079 industry has diversified globally. 78 00:04:21.600 --> 00:04:24.800 Give enough money and enough time, yes, it's feasible you 79 00:04:24.839 --> 00:04:27.680 could bring that back. But what you would need to 80 00:04:27.720 --> 00:04:32.240 have is a long term, sustained tariff that people understand 81 00:04:32.319 --> 00:04:34.480 what the rules are. It's when you keep going on again, 82 00:04:34.560 --> 00:04:37.399 off again. No one wants to invest the billions of 83 00:04:37.439 --> 00:04:40.759 dollars to build a new plant and have two or 84 00:04:40.800 --> 00:04:43.240 three years for it to ramp up. If the next 85 00:04:43.279 --> 00:04:46.279 president comes in eliminates the tariffs and you just wasted 86 00:04:46.360 --> 00:04:49.480 a whole bunch of that money. So is it possible, yes, 87 00:04:49.680 --> 00:04:52.560 is it going to take time? Absolutely? So you're talking 88 00:04:52.560 --> 00:04:55.279 about these plants can take three to five years to 89 00:04:55.319 --> 00:04:58.240 build and get the first product out the door, and 90 00:04:58.319 --> 00:05:00.800 by then Trump will no longer or be president. 91 00:05:01.759 --> 00:05:06.639 Well, we've been fighting inflation and after the pandemic. Well, 92 00:05:07.000 --> 00:05:09.639 let me rephrase this. During the pandemic, we saw a 93 00:05:09.680 --> 00:05:13.920 lot of problems with the chokehold around supply chains, and 94 00:05:13.959 --> 00:05:17.360 that impacted the auto industry pretty significantly during the pandemic. 95 00:05:17.519 --> 00:05:19.839 Did we ever fully recover from that or we back 96 00:05:19.879 --> 00:05:21.879 to where we were before twenty twenty? 97 00:05:23.319 --> 00:05:27.879 We are just now getting back with inventory levels, at 98 00:05:27.959 --> 00:05:30.800 least in the auto industry, back up closer to what 99 00:05:31.000 --> 00:05:33.399 normal was. So there's going to be a little bit 100 00:05:33.439 --> 00:05:35.920 of a cushion before it hits US, but it was 101 00:05:36.519 --> 00:05:39.120 very disruptive for the supply chain, and you're going to 102 00:05:39.160 --> 00:05:41.720 see the same thing. Some of these parts going into 103 00:05:41.720 --> 00:05:44.399 that vehicle go back and forth across the border three 104 00:05:44.519 --> 00:05:48.079 or four times before the finished vehicle is sold. So 105 00:05:48.120 --> 00:05:49.839 you don't just pay the tariff lunch, you pay it 106 00:05:49.879 --> 00:05:52.639 each time it goes across the border. So it's going 107 00:05:52.720 --> 00:05:55.720 to be a huge impact for all of those and 108 00:05:56.000 --> 00:05:58.439 most of the vehicles in the US have at least 109 00:05:58.480 --> 00:06:02.720 twenty to fifty percent foreign parts that go in coming 110 00:06:02.720 --> 00:06:03.879 from outside the US. 111 00:06:04.040 --> 00:06:04.959 And then at what point. 112 00:06:05.040 --> 00:06:09.079 Do we talk about the potential for a government bailout 113 00:06:09.319 --> 00:06:12.600 of the American car companies if they are hit hard 114 00:06:12.639 --> 00:06:14.439 to the point of needing help. 115 00:06:16.360 --> 00:06:18.519 Well, we've done it more than once. We've done it 116 00:06:18.600 --> 00:06:22.399 at least a few times. For what's now called Stilantis 117 00:06:22.519 --> 00:06:25.720 used to be called Chrysler. They've been bailed out multiple times. 118 00:06:26.079 --> 00:06:28.519 But I think for the most part, you have different 119 00:06:28.800 --> 00:06:31.839 levels of pain. So Ford has eighty percent of their 120 00:06:31.920 --> 00:06:34.600 vehicles made in the US. The parts are going to 121 00:06:34.600 --> 00:06:37.399 become more expensive as they come back and forth across 122 00:06:37.920 --> 00:06:41.800 but Stillantis has a lot of their content and gener motors. 123 00:06:41.839 --> 00:06:45.600 Even more of their content susstible to US and Mexico. 124 00:06:45.720 --> 00:06:48.839 So the best or Canada and Mexico. The best hope 125 00:06:48.879 --> 00:06:53.000 is that they can negotiate some changes in what is 126 00:06:53.120 --> 00:06:55.920 or what is not covered by the tariffs, and that 127 00:06:56.079 --> 00:07:01.199 has been changing, so the USMCA, the NAFTA two point 128 00:07:01.279 --> 00:07:06.160 zero that President Trump negotiated in this previous administration. If 129 00:07:06.160 --> 00:07:09.600 they can maintain some of those conditions, it made less 130 00:07:09.600 --> 00:07:12.959 than some of the impact from US, Mexico and Canada. 131 00:07:13.000 --> 00:07:15.000 But for right now, they're all on the hook. 132 00:07:15.240 --> 00:07:18.079 When you look at Asia, who needs who more. Do 133 00:07:18.120 --> 00:07:20.920 we need the parts that are made in Asia at 134 00:07:20.959 --> 00:07:23.839 the cost that they're made there more? Or do they 135 00:07:23.879 --> 00:07:27.120 need American consumers buying their vehicles and their parts more. 136 00:07:28.360 --> 00:07:32.199 I think it's a global dependence on each other. So 137 00:07:32.279 --> 00:07:34.439 I think they need us, and I think we need them. 138 00:07:34.519 --> 00:07:37.879 But at some point in time, can China survive without 139 00:07:37.920 --> 00:07:41.199 the US market? Yes, they got more than a billion, 140 00:07:41.800 --> 00:07:44.600 four one hundred million people there, so yes, they have 141 00:07:44.680 --> 00:07:48.399 their own market. Can the US survive on their own yes? 142 00:07:48.480 --> 00:07:51.319 Will it cost us all more money, yes, but we 143 00:07:51.720 --> 00:07:53.959 can We can get by on our own. But it's 144 00:07:54.000 --> 00:07:55.839 a whole lot easier if we all work together. 145 00:07:57.199 --> 00:07:58.360 Art, great stuff. 146 00:07:58.360 --> 00:08:01.399 We really appreciate you taking time for us today. 147 00:08:01.959 --> 00:08:02.920 Thank you my pleasure. 148 00:08:03.000 --> 00:08:05.360 You bet Arthur Wheaton there again, director of Labor Studies 149 00:08:05.360 --> 00:08:06.480 at Cornell. 150 00:08:06.759 --> 00:08:10.120 You call him Art, well, I hope, I mean that's 151 00:08:10.120 --> 00:08:10.560 why I did it. 152 00:08:10.560 --> 00:08:12.199 At the end, I don't know if you knew him 153 00:08:12.240 --> 00:08:15.279 because you called him Art like that's that's the next 154 00:08:15.360 --> 00:08:17.639 level relation. I mean, I guess we aret we talked 155 00:08:17.680 --> 00:08:19.079 to him. You didn't call him art right out of 156 00:08:19.079 --> 00:08:19.920 the gate, No, I. 157 00:08:20.240 --> 00:08:22.959 Waited, I warmed up right. I let him think we 158 00:08:22.959 --> 00:08:23.360 were friends. 159 00:08:23.360 --> 00:08:25.120 He could be one of those guys who's only been 160 00:08:25.199 --> 00:08:26.199 Arthur his whole life. 161 00:08:26.240 --> 00:08:30.079 Well, the article where we found him from Bloomberg, he 162 00:08:30.519 --> 00:08:31.160 went by Art. 163 00:08:31.240 --> 00:08:31.720 Oh good. 164 00:08:31.879 --> 00:08:34.000 I'm so glad I didn't break ice on that because 165 00:08:34.039 --> 00:08:36.000 I wanted to have him back. But if you offended 166 00:08:36.039 --> 00:08:40.840 him and burn that bridge. As we were saying goodbye. 167 00:08:42.279 --> 00:08:44.480 A little bit later in the show, we're going to 168 00:08:44.559 --> 00:08:48.200 talk about the the A's. 169 00:08:47.600 --> 00:08:50.919 Not the well, the Sacramento A's and the drone that 170 00:08:51.000 --> 00:08:51.960 interrupted the games. 171 00:08:52.039 --> 00:08:54.919 Yes, so I saw pictures from that game, and it 172 00:08:55.000 --> 00:08:58.840 looked very much like spring training, which is really cool. 173 00:08:58.879 --> 00:09:00.720 It's the most expensive to it, by the way, in 174 00:09:00.759 --> 00:09:03.080 Major League Baseball right now. Oh really, because there's only 175 00:09:03.120 --> 00:09:04.559 fourteen thousand seats. 176 00:09:05.240 --> 00:09:07.720 I get and it was packed. Yeah, I don't know 177 00:09:07.759 --> 00:09:09.399 what I mean. That was opening night, but it. 178 00:09:09.919 --> 00:09:12.559 Looked very cool. It's a great ballpark there in West Sacramento. 179 00:09:12.799 --> 00:09:14.279 All Right, we'll talk about that a little bit more 180 00:09:14.279 --> 00:09:16.080 on tariffs at the bottom of the hour. We're going 181 00:09:16.120 --> 00:09:19.759 to continue this look because specifically, the auto industry is 182 00:09:19.799 --> 00:09:21.480 the one that we have at least sort of a 183 00:09:22.200 --> 00:09:25.559 better handle on when it comes to how tariffs could 184 00:09:25.600 --> 00:09:27.159 affect what goes on in the future. 185 00:09:27.240 --> 00:09:30.240 Ooh, and coming up next, it looks like Trump's next 186 00:09:30.240 --> 00:09:32.279 tariffs are going after big pharma. 187 00:09:32.320 --> 00:09:34.799 How that's going to affect your pills? We come back. 188 00:09:36.080 --> 00:09:39.519 You're listening to Gary and Shannon on demand from KFI 189 00:09:39.759 --> 00:09:40.639 AM six forty. 190 00:09:42.320 --> 00:09:46.320 Hey, you like botox, you like waygo v, you like 191 00:09:46.440 --> 00:09:52.519 zep bound, you don't like cancer. These are all drugs 192 00:09:52.720 --> 00:09:58.480 or active ingredients for these drugs that suppliers are shipping 193 00:09:58.519 --> 00:10:01.159 now by air to the United States because they're worried 194 00:10:01.200 --> 00:10:06.919 about tariffs on pharmaceuticals. EU medicine and pharmaceutical product exports 195 00:10:06.960 --> 00:10:11.080 to the US totaled about ninety billion euro about ninety 196 00:10:11.080 --> 00:10:16.639 seven billion dollars in twenty twenty three. Several investors and 197 00:10:16.679 --> 00:10:21.519 analysts following this whole deal say that well shares are 198 00:10:21.559 --> 00:10:27.399 already hurting, but there have actually been drug makers taking 199 00:10:27.440 --> 00:10:30.879 the unusual steps of sending medicines by air. 200 00:10:30.960 --> 00:10:34.039 To the US just to get them here, just to. 201 00:10:34.000 --> 00:10:39.279 Get them here before the Liberation Day tomorrow. Two European 202 00:10:39.360 --> 00:10:42.320 headquartered drug makers told Reuters they're sending as much of 203 00:10:42.360 --> 00:10:45.440 their medicines across the Atlantic as possible. They've been doing 204 00:10:45.480 --> 00:10:48.960 over the past several weeks, they heard other pharmaceutical companies 205 00:10:49.000 --> 00:10:50.200 are doing the same. 206 00:10:51.440 --> 00:10:56.360 So on Friday, Trump said that the specific tariffs when 207 00:10:56.360 --> 00:10:59.480 it comes to pharmaceuticals would be coming soon. And part 208 00:10:59.559 --> 00:11:02.000 of the issue you that has driven the markets crazy 209 00:11:02.039 --> 00:11:04.679 over these last few days and weeks is that there 210 00:11:04.720 --> 00:11:07.480 are no specifics about all of this just I mean 211 00:11:07.559 --> 00:11:11.519 literally minutes ago, Caroline Levitt in the White House Press 212 00:11:11.559 --> 00:11:14.639 briefing said, the President has decided on all of these. 213 00:11:14.679 --> 00:11:16.159 He's just not talent anybody yet. 214 00:11:16.279 --> 00:11:18.559 The President said last night he has made a decision 215 00:11:18.679 --> 00:11:20.639 in a determination. I was with him in the Oval 216 00:11:20.639 --> 00:11:23.919 Office earlier, and he is going to announce that decision tomorrow. 217 00:11:23.960 --> 00:11:25.519 I don't want to get head of the president. This 218 00:11:25.600 --> 00:11:28.159 is obviously a very big day. He's with his trade 219 00:11:28.200 --> 00:11:31.039 and tariff team right now perfecting it to make sure 220 00:11:31.159 --> 00:11:33.799 this is a perfect deal for the American people and 221 00:11:33.840 --> 00:11:36.039 the American worker, and you will all find out in 222 00:11:36.080 --> 00:11:37.399 about twenty four hours from now. 223 00:11:37.519 --> 00:11:40.399 Yes, so about one o'clock I believe tomorrow is when 224 00:11:40.440 --> 00:11:42.440 the President's expected to make these announcements. 225 00:11:42.440 --> 00:11:46.320 Pharmaceutical products have long been spared from trade wars. 226 00:11:46.000 --> 00:11:47.360 Due to potential harms. 227 00:11:47.480 --> 00:11:51.279 Right, we need those, but Trump's move to increase tariffs 228 00:11:51.320 --> 00:11:55.440 on goods from China, including finished drugs and raw ingredients, 229 00:11:56.039 --> 00:11:58.840 as well as the early round of tariffs on goods 230 00:11:58.919 --> 00:12:02.120 like steel and bourbon, has raised the expectations that medicines 231 00:12:02.200 --> 00:12:04.240 will join the list. 232 00:12:06.440 --> 00:12:10.679 I am it sounds a lot like the determination about 233 00:12:10.799 --> 00:12:13.559 how we're going to do these auto tariffs as well, 234 00:12:13.720 --> 00:12:17.080 whether it's the finished product or the ingredients the main 235 00:12:17.200 --> 00:12:18.639 ingredients in them, or. 236 00:12:18.559 --> 00:12:19.559 Both or both. 237 00:12:19.639 --> 00:12:19.799 Yea. 238 00:12:20.360 --> 00:12:25.240 Trump had previously singled out Ireland specifically because apparently Ireland 239 00:12:25.320 --> 00:12:28.000 is home to manufacturing plants for most of the world's 240 00:12:28.039 --> 00:12:29.799 top ten pharmaceutical companies. 241 00:12:29.879 --> 00:12:31.759 Yeah, who knew. I just learned that this morning. 242 00:12:34.440 --> 00:12:37.879 So again the details of it still hidden somewhere deep 243 00:12:37.919 --> 00:12:41.200 within the White House. And it turns out that President 244 00:12:41.279 --> 00:12:43.840 Trump has scheduled a news conference tomorrow to get into 245 00:12:43.840 --> 00:12:44.759 some of the details. 246 00:12:45.559 --> 00:12:46.320 We had seen. 247 00:12:46.399 --> 00:12:49.440 For the most part, another down day on Wall Street 248 00:12:49.480 --> 00:12:55.200 because of the uncertainty that surrounds all of the all 249 00:12:55.240 --> 00:12:58.720 of the tariff decisions, and in fact, the announcement, significantly 250 00:12:58.720 --> 00:13:01.480 I mentioned comes at one o'clock, one o'clock hour time 251 00:13:02.000 --> 00:13:06.039 after the bell closes, after the market's close on Wall Street. 252 00:13:06.120 --> 00:13:09.440 Coming up next, we touched on the auto industry and 253 00:13:09.480 --> 00:13:12.279 the tariffs ahead for the auto industry. We're going to 254 00:13:12.320 --> 00:13:15.440 be talking to a senior editor at Kelly Bluebook and 255 00:13:15.519 --> 00:13:17.759 Auto Trader about what does this mean if you're in 256 00:13:17.799 --> 00:13:19.840 the market for a car, maybe you've got a used 257 00:13:19.840 --> 00:13:22.799 car on your hands. Is this a time to sell 258 00:13:22.879 --> 00:13:25.559 and to buy because of the uncertainty. 259 00:13:25.720 --> 00:13:27.240 We'll get some answers when we come back. 260 00:13:28.679 --> 00:13:32.120 You're listening to Gary and Shannon on demand from KFI 261 00:13:32.360 --> 00:13:33.240 AM six forty. 262 00:13:35.440 --> 00:13:41.759 This is a case that has dissected bisected Boston in 263 00:13:41.840 --> 00:13:46.000 terms of opinion, with a lot of people believing that 264 00:13:46.080 --> 00:13:48.679 she's the one to blame for the murder of her 265 00:13:48.720 --> 00:13:51.960 boyfriend who was a Boston police officer. And then there's 266 00:13:52.000 --> 00:13:55.279 the camp that is in Karen Reid's defense and says 267 00:13:55.399 --> 00:13:58.720 that it was a cover up by police officers and 268 00:13:58.720 --> 00:14:00.879 that it was a drunken night gone wrong and they're 269 00:14:00.879 --> 00:14:03.519 pinning it on her anyway. It was a hung jury 270 00:14:03.559 --> 00:14:07.840 the first time, and today jury selection begins again. We'll 271 00:14:07.840 --> 00:14:09.600 get into it coming up in the twelve o'clock hour. 272 00:14:09.720 --> 00:14:13.919 Well, we're already concerned about inflation. There's some speculation maybe 273 00:14:13.960 --> 00:14:17.559 some anxiety even about Liberation Day, when a bunch of 274 00:14:17.559 --> 00:14:21.360 tariffs are supposed to be imposed on stuff that's imported 275 00:14:21.399 --> 00:14:25.639 into the United States. One of those imports is going 276 00:14:25.720 --> 00:14:28.600 to be the price of cars is going to go up. 277 00:14:29.440 --> 00:14:31.639 I don't know how it couldn't joining us to talk 278 00:14:31.639 --> 00:14:34.200 more about this. Brian Moody is senior editor at Auto 279 00:14:34.240 --> 00:14:37.120 Trader in Kelly Bluebook. Brian, first of all, thanks for 280 00:14:37.159 --> 00:14:40.279 taking time and help us try to untangle some of 281 00:14:40.320 --> 00:14:42.080 what's about to happen to the economy. 282 00:14:43.399 --> 00:14:46.240 Yeah, of course, it's interesting the way this has moved 283 00:14:46.320 --> 00:14:49.399 all of a sudden. The automotive space has more new 284 00:14:49.480 --> 00:14:51.480 news than say the Hollywood Reporter. 285 00:14:52.559 --> 00:14:54.799 Well, listen, we don't. 286 00:14:55.720 --> 00:14:58.600 I think one of the issues about the tariffs is 287 00:14:59.399 --> 00:15:02.000 people are having hard time kind of wrapping our heads around, well. 288 00:15:01.879 --> 00:15:04.840 Do we buy now because we just don't know what's 289 00:15:04.879 --> 00:15:07.360 going to happen with the dealerships. Do we sell our 290 00:15:07.559 --> 00:15:10.840 used cars now because or do we wait because those 291 00:15:10.879 --> 00:15:12.000 prices are going to go up? 292 00:15:13.440 --> 00:15:15.240 Right, the prices are going to go up. So here's 293 00:15:15.279 --> 00:15:16.879 the main thing that I would say. If you're looking 294 00:15:16.919 --> 00:15:20.120 for a used car, and for the purposes of this conversation. 295 00:15:20.200 --> 00:15:22.279 When I say used, I mean a lightly used car 296 00:15:22.320 --> 00:15:24.919 between one and five years old. If you're looking for 297 00:15:25.000 --> 00:15:27.559 a ten thousand dollars car with one hundred thousand miles 298 00:15:27.639 --> 00:15:29.440 or whatever, that's probably not going to change that much. 299 00:15:29.480 --> 00:15:32.720 It's the lightly used cars that, by the way, we're 300 00:15:32.840 --> 00:15:35.679 already in short supply because of the new cars that 301 00:15:35.759 --> 00:15:38.559 didn't get made during the pandemic. So if that's you, 302 00:15:38.639 --> 00:15:41.120 as a customer of a lightly used car, I would 303 00:15:41.120 --> 00:15:42.840 absolutely start looking right now. 304 00:15:44.919 --> 00:15:48.240 When it comes to the price increases that we do 305 00:15:48.320 --> 00:15:52.080 expect on imported cars. With the ones that are I 306 00:15:52.080 --> 00:15:57.080 mean it's hard to even explain this, but predominantly foreign vehicles, 307 00:15:57.200 --> 00:15:58.639 even though some of the parts may come from the 308 00:15:58.720 --> 00:16:01.720 United States, those prices are going to go up. 309 00:16:01.799 --> 00:16:03.320 Is there a specific. 310 00:16:04.279 --> 00:16:08.360 Segment of the car industry that will see more of 311 00:16:08.399 --> 00:16:08.960 an impact? 312 00:16:09.120 --> 00:16:12.279 Is it the higher higher price cars, the lower price cars. 313 00:16:13.600 --> 00:16:16.039 You know what's hard to It's not going to go 314 00:16:16.080 --> 00:16:20.440 by price, however, I say that, but what automakers may 315 00:16:20.559 --> 00:16:23.720 do is look at their entire portfolio and say, hey, 316 00:16:23.759 --> 00:16:26.519 these inexpensive cars are built here in the US, and 317 00:16:26.639 --> 00:16:31.120 these priceier cars are built outside. They can't just raise 318 00:16:31.200 --> 00:16:33.399 prices on certain cars. Not On the other they're going 319 00:16:33.440 --> 00:16:36.480 to try to even it out, get suppliers to ship in, 320 00:16:36.519 --> 00:16:38.919 but even it out across their model lines so that 321 00:16:38.960 --> 00:16:41.720 there's less of a sticker shock. So, for example, an 322 00:16:41.759 --> 00:16:45.200 economy car that costs twenty five thousand dollars simply can't 323 00:16:45.200 --> 00:16:48.879 support a three thousand dollars price increase, right, But a 324 00:16:49.000 --> 00:16:52.320 ninety thousand dollars pickup, if you add thirty five hundred 325 00:16:52.320 --> 00:16:55.360 dollars to that price, that customer probably can support that. 326 00:16:55.879 --> 00:16:58.200 And the other thing to remember is when we say 327 00:16:58.279 --> 00:17:01.840 import and domestic, the truth is many brands that we 328 00:17:01.960 --> 00:17:06.240 think of as imports, such as Honda, Nissan, Toyota, Merceites, Benz, 329 00:17:06.720 --> 00:17:09.839 those companies build their cars in the US for the 330 00:17:09.880 --> 00:17:11.920 most part. And on the other hand, a lot of 331 00:17:11.920 --> 00:17:15.079 domestic brands, not all, but they build many of their 332 00:17:15.119 --> 00:17:18.599 models outside the US, specifically Mexico or Canada. 333 00:17:19.200 --> 00:17:23.839 Do you see this global market, I'll ask you this question. 334 00:17:24.400 --> 00:17:26.880 It's become a global market. It's not as easy to 335 00:17:26.920 --> 00:17:29.799 say buy American anymore because of what you just mentioned. 336 00:17:29.799 --> 00:17:32.799 A lot of the parts are coming from other places. 337 00:17:34.119 --> 00:17:37.680 Do you see it being a situation where we could 338 00:17:37.839 --> 00:17:43.440 bring parts manufacturing back to this country, primarily for American 339 00:17:43.519 --> 00:17:46.359 cars in our lifetime. 340 00:17:47.799 --> 00:17:50.799 It's possible, and some manufacturers are already doing that. For 341 00:17:51.759 --> 00:17:54.000 we see Tesla as a model for that. They make 342 00:17:54.039 --> 00:17:56.000 a lot of their cars in the US and they 343 00:17:56.039 --> 00:17:59.279 also have a battery and power train facility inside the US, 344 00:17:59.640 --> 00:18:03.119 as as the Hyundai Motor Group. Hundai Motor Group solves 345 00:18:03.160 --> 00:18:06.480 the brands Hyundai, Kia, and Genesis, and they just built 346 00:18:06.599 --> 00:18:10.519 a new gigantic factory near Savannah, Georgia, but not only 347 00:18:10.599 --> 00:18:14.200 will manufacture cars for three brands, but also have an 348 00:18:14.240 --> 00:18:18.920 on site battery facility, So yes, that is possible. Nissan 349 00:18:19.000 --> 00:18:23.680 has an engine plant in Tennessee that also services Nissan vehicles, 350 00:18:23.759 --> 00:18:25.839 so yes, that's not uncommon. 351 00:18:26.240 --> 00:18:29.079 But we're hopefully. I mean, the whole goal of. 352 00:18:29.039 --> 00:18:32.319 This is that you see more of that. But you know, 353 00:18:32.480 --> 00:18:34.880 this is all just speculation at the end of the day. 354 00:18:35.119 --> 00:18:38.160 Does any of that mean lower prices for consumers even 355 00:18:38.200 --> 00:18:39.880 five years from now? I really don't know. 356 00:18:40.319 --> 00:18:42.880 Is there a brand that you see faring better? 357 00:18:46.119 --> 00:18:49.400 A brand that has a diverse portfolio of cars made 358 00:18:49.759 --> 00:18:52.440 in multiple places will probably do better. Of course, we 359 00:18:52.440 --> 00:18:54.839 could say any brand where all the cars are made 360 00:18:54.880 --> 00:18:57.160 inside the US would be great. But the truth is, 361 00:18:57.400 --> 00:19:00.160 as you said before, parts come from their places. There 362 00:19:00.240 --> 00:19:02.599 really is no such thing as a one hundred percent 363 00:19:03.240 --> 00:19:07.240 inside the USA made car. So Tesla has lots of 364 00:19:07.279 --> 00:19:10.640 cars that come from the US, they probably would be okay, Rivian. 365 00:19:10.799 --> 00:19:14.000 Same thing when you look at Nissan, they have a 366 00:19:14.079 --> 00:19:17.279 large number of cars made inside the US, but also 367 00:19:17.480 --> 00:19:21.279 some made outside the US. So those types of brands. 368 00:19:21.359 --> 00:19:24.200 Toyota makes many of the cars they sell in the 369 00:19:24.319 --> 00:19:26.359 US right here in the US. 370 00:19:26.559 --> 00:19:28.519 I want to ask you about Tesla specifically. 371 00:19:28.640 --> 00:19:32.119 Some critics of Elon Musk and the President have said 372 00:19:32.119 --> 00:19:35.359 that this was a favor to Tesla because it, like 373 00:19:35.400 --> 00:19:36.480 you said, does. 374 00:19:36.279 --> 00:19:38.000 Produce a lot of vehicles here in the US. 375 00:19:38.359 --> 00:19:40.759 But don't they also have factories in other parts of 376 00:19:40.759 --> 00:19:43.480 the world that specifically cater to those other parts of 377 00:19:43.519 --> 00:19:43.920 the world. 378 00:19:45.240 --> 00:19:48.160 Yeah, and that's the way that they've been doing business. 379 00:19:48.200 --> 00:19:50.680 So that's what's so odd about this is that for 380 00:19:50.799 --> 00:19:54.599 decades we've been sort of helping to orchestrate a system 381 00:19:54.599 --> 00:19:58.680 whereby manufacturers build where they sell. Now they don't just 382 00:19:58.799 --> 00:20:01.160 sell cars in the US. There's a good chance that 383 00:20:01.240 --> 00:20:03.519 whatever car they sell in the US they also sell 384 00:20:03.519 --> 00:20:06.960 in Mexico and South America. It only makes sense to 385 00:20:07.039 --> 00:20:10.200 centralize the location for building those cars for the purposes 386 00:20:10.240 --> 00:20:15.200 of a scale and also just economics. So yes, while 387 00:20:15.240 --> 00:20:19.640 one manufacturer like Bulbo or Tesla might make cars here 388 00:20:19.680 --> 00:20:21.799 in the US, they also make them other places to 389 00:20:21.839 --> 00:20:26.119 sell to those markets. And while it may advantage Tesla 390 00:20:26.119 --> 00:20:30.079 to have a tariff that only goes toward cars coming 391 00:20:30.079 --> 00:20:32.920 from outside the US, it would also advantage cars like 392 00:20:32.960 --> 00:20:36.319 the Ford Mustang GT, certain versions of the Jeep Wrangler, 393 00:20:36.519 --> 00:20:39.680 the Volkswagen ID four, as well as the Honda Odyssey, 394 00:20:39.680 --> 00:20:43.759 Honda Ridgeline, and other vehicles like that. Anybody who builds 395 00:20:43.759 --> 00:20:47.160 their cars inside the US, Kia is another one. It's 396 00:20:47.200 --> 00:20:49.799 going to help them. It wouldn't just only help Tesla. 397 00:20:49.839 --> 00:20:50.559 That would be silly. 398 00:20:51.119 --> 00:20:54.000 Brian, you drive a sob Any chance of the manual 399 00:20:54.039 --> 00:20:56.960 transmission making a comeback in this country. 400 00:20:58.039 --> 00:20:59.680 Nobody cares about that. 401 00:21:00.160 --> 00:21:00.880