We Need an Interdependence Holiday
It’s a tough year. I’m not feeling at all proud of the USA right now this is a moment of us at our worst short of war. There is signal to noise ratio problem in politics and news outlets. To cut through, talk to the people affected in their lives, their jobs, their relationships. Cut out all the middlemen of information. Anecdotal? Appeal to authority? Well yes and no. Because logic also dictates that we set aside the noise. And then examine whats left.
So part of that today might be talking to one another. Gather our strength. Improve our networks. Because this independence day we need one another.
President Trump is imposing xenophobia on fictional premises. I’ll not list them again here. We have heard from parents separated, even some of the kids. Let’s hear from some industry pros that know their stuff. This subject below perfectly mingles xenophbia, ignorance, real industry and massive economic implications in just one article. I grabbed a little of the less juicy bits here. Please do take in the rest.
The industry’s top lobbyist, the American Alliance of Automobile Manufacturers, can be prone to exaggeration, but their numbers here aren’t far off the mark: The proposed tariffs would constitute a de facto $45 billion annual tax on car consumers. The Alliance says that would lay waste to new-car sales, forcing automakers to shutter factories and lay off workers. Tariffs and trade wars are a lousier idea today than ever. But as Toyota noted, now’s a particularly bad time, with the auto industry facing slack demand and a few tough years after a historic run of sales. Kneecap the auto industry, which employs about six million people overall—about 90 times more jobs than the coal industry that Trump obsesses over—and you could kneecap the entire economy. There are already troubling warning signs of a looming contraction or even another recession, including bond yield curves that are a surprisingly accurate predictor of economic malaise.
Most insultingly, Trump has the Commerce Department investigating whether “foreign” automakers are a national security threat to America. He expects his answer, neatly rubber-stamped, in a few weeks. Perhaps he could just put in a call to working folks in Georgetown, Kentucky, Smyrna, Tennessee, or Spartanburg, S.C.—to name just three cities in states that Trump carried in the election. Those respective cities are where Toyota builds the Camry; where Nissan assembles some 600,000 cars a year; and where BMW cranks out more SUVs than any of its plants around the world. I imagine those people would be surprised to learn that the companies who provide their paychecks and feed their families are on Trump’s ever-expanding enemies list. How, they would surely ask, would a trade war improve their lives, and those of working people throughout America, including the millions who cast hopeful votes for Trump?
As every industry and Wall Street analyst worth the name is warning—no, not Navarro, who already guessed wrong on metal tariffs—stiff auto tariffs would set off major retaliation from other nations that will only crimp U.S. exports and jobs. Those BMW SUVs that roll out of South Carolina? BMW exports them to 140 countries. In fact, international automakers, meaning those not headquartered here, now account for 47 percent of U.S. light vehicle production. Roughly five million cars rolled off their American assembly lines last year. In today’s economy, a neural network made up of billions of links and trillions of transactions, there can be no trade position in which only America “wins,” and everyone else gets crumbs. Who, and what, are you gonna tax? How do you separate all those infinite strands? FiatChrysler is headquartered in Italy. Among made-in-America cars that contain the most U.S.-sourced parts, the Top Five are all from…Japanese companies. The Camry often leads that list, but we’re still talking just 75 percent of its parts total, with the other 25 percent sourced from abroad. GM’s dizzyingly complex parts chain includes some 20,000 suppliers around the globe.