Thread: Trump’s border tax would massively help Tesla

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Trump’s border tax would massively help Tesla


Chris Mills @chrisfmills
February 6th, 2017 at 5:24 PM

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In recent weeks, Donald Trump has been kicking around the idea of an import tax on Mexican goods.

The specifics are nowhere to be found — probably because they don’t exist — but that hasn’t stopped research shop Baum and Associates from working out what the impact would be on the nation’s automakers.

Across the board, the report doesn’t paint a pretty picture. The price of cars would go up for nearly every car manufacturer, with some companies seeing a per-vehicle increase of over $10,000. But the one car company that would be sitting pretty? Tesla.

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The report, which was seen by Bloomberg, factors in the cost of importing an entire car or components, given a border-adjusted 20 percent tax. According to the estimates, conventional automakers would face radically different price increases: Ford would be hit with an additional $242 per vehicle, while Land Rover and Volvo would be looking at nearly $10,000 per car. That would make overseas production unfeasible at current prices, and passing the full cost of the tax onto consumers would see radically lower sales.

Tesla, on the other hand, manufactures its vehicles in the USA. It famously uses fewer third-party components than other automakers, and is even working on building a Gigafactory to produce batteries, one of the few things it currently buys elsewhere.

It’s worth mentioning that both GM CEO Mary Barra and Tesla CEO Elon Musk sit on Trump’s Economic Advisory Forum, which has input on trade and taxation policy.

Although a border tax would make producing cars more expensive for GM, it would likely benefit overall from a border-adjusted tax policy.

Competitors, particularly for higher-margin SUVs, would be hit much harder by the tax, which would likely push customers to GM and Ford.

http://bgr.com/2017/02/06/trump-border-tax-tesla-gm/

Everyone in our country would benefit. There are no losers to this. Same as there are no losers from the FairTax, except illegal aliens who lose big and countries that we have trade deficits with because the FairTax helps correct both problems in addition to setting Americans free of tax returns and income tax reporting resulting in hundreds of billions of dollars every year in compliance savings and increased productivity.

JUST DO IT!!

FairTax now because this IS a 23% "border tax" on every product or service imported into the US that results in a final retail finished goods sale in the United States.

FairTax Act of 2017, HR 25 in the US House of Representatives and S 18 in the US Senate. Pass it now House and Senate Republicans, it's the best single piece of economic development legislation ever presented to the US Congress.

Carlos Slim And Mexico's Bread Giant Bimbo To Launch A Made-In-Mexico Electric Car

Here are the losers.

"Texas agricultural experts say President Trump's threatened tariff on Mexican goods could lead to retaliation that would hurt Texas farmers and ranchers — as well as consumers"
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Texas agriculture experts: Mexico may retaliate if U.S. imposes tariffs

Texas agricultural experts say President Trump's threatened tariff on Mexican goods could lead to retaliation that would hurt Texas farmers and ranchers — as well as consumers

BY MARIANA ALFARO FEB. 8, 201712:01 AM

Stacks of fresh vegetables from Mexico await loading into north-bound trucks at the McAllen Produce Terminal. Douglas Young


Texas agricultural producers say if the White House slaps a tariff on Mexican products,the state's farmers and ranchers — as well as Texas consumers — could suffer from a Mexican retaliation against U.S. exports.

Two weeks ago, President Donald Trump said the border wall he promised to build between Mexico and the United States could be paid for by placing a 20 percent tax on all Mexican imports. Hours later, White House Press Secretary Sean Spicer clarified that this proposal was just one of many approaches currently under review by the administration.

Mexico's economy minister, Idelfonso Guajardo, said in an interview with Mexican television that his country would need to be prepared to "immediately neutralize" the impact of any U.S. border tax.

“And it is very clear how – take a fiscal action that clearly neutralizes it,” he said.

The idea of a tariff on Mexican imports or a radical change to the North American Free Trade Agreement — another Trump promise — worries many Texas agriculture industry leaders, who say it is in the state’s best interest to continue fostering a positive trade relationship with Mexico rather than imposing tariffs on their imports.

Mexico is the state’s largest trade partner, overshadowing its two closest competitors, China and Canada, by billions of dollars. According to U.S. Census data, in 2015 Mexico imported more than $92 billion worth of goods from Texas, while Texas imported more $84 billion worth of goods from Mexico.

Luis Ribera, an associate professor at Texas A&M University’s Center for North American Studies, said any large-scale tariff on Mexican goods would hurt American consumers more than anyone else by making everything from avocados to tomatoes more expensive for Americans — or compelling Mexico to buy Texas-produced staples like wheat, beef and corn from other countries.

“We're going to lose that market or (if we don’t) lose it, we're going to get tariffs on the products that we send to Mexico,” Ribera said. “So it's going to make our products less competitive when we compete with the rest of the world.”

Steelee Fischbacher, director of policy and marketing at the Texas Wheat Producers Board and Association, said a potential Mexican tax worries the Texas wheat industry because Mexico is the largest importer of hard red winter wheat, the top class of wheat produced in the state. In 2011, the U.S. exported 2.4 million metric tons of hard wheat to Mexico, according to a Texas A&Mstudy.

"Being our number one customer, it's a very critical market for us, especially in a time where we have low wheat prices," she said, adding that Mexico has plenty of other potential trading partners for wheat such as Argentina, Canada and Australia.

Robert McKnight Jr., vice president of the Texas and Southwestern Cattle Raisers Association, said any threat to the current “integrated” cattle and beef trade system between Mexico, the U.S. and Canada could also be detrimental for the Texas beef industry. Well over half of Texas’ cattle imports, he said, come from Mexico and Canada.

McKnight said international trade adds close to $300 to the value of each head of Texas cattle. “To threaten any part of that $300 for the producers would be very tough, if not devastating for us," he said.

In a recent meeting with Mexican and Canadian cattle raisers, McKnight said representatives from all three countries agreed that it doesn’t hurt to sit down and review the NAFTA agreement, but the countries should “take the scalpel instead of the hatchet” if they’re going to change.
At the consumer level, Bret Erickson, president of the Texas International Produce Association, said a tariff or trade war with Mexico would limit the variety of produce available for Texans, since Mexico is the largest supplier of fruits and vegetables to the state. Though the argument has been made that pricier Mexican goods could be offset by an increase in the production and sales of Texas-made produce, Erickson said that isn't likely.

"If the administration did institute a tariff across the board on all commodities, onions is something that I think would see a bump in production in Texas but I don't think that necessarily translates to reduced costs to the U.S. consumer," he said. "I think it just presents an opportunity for Texas producers increase their acreage and be competitive.”

Read more:

• Trump suggests large tax on Mexican imports to pay for border wall.
• Trump expanded his executive action beyond a border wall to include detention space for undocumented immigrants.

Disclosure: Texas A&M University and the Texas and Southwestern Cattle Raisers Association have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors is available here.

https://www.texastribune.org/2017/02...s-are-imposed/

We don't care. The price of wheat isn't our problem, illegal immigration and huge trade deficits are the problem.

Report: Texas is the biggest loser in Mexico trade war

By David Hendricks, San Antonio Express-News
Updated 7:02 am, Wednesday, February 8, 2017

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Photo: Bob Owen /San Antonio Express-News


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Trump's trade war


A recent study by WalletHub shows which states would be most impacted by Trump's 20 percent tariff on Mexican goods.


Click through to see which states would be the most and least affected by a Mexico-U.S trade war.



IMAGE 1 OF 24

Trucks line up at the U.S. Customs and Border Protection checkpoint at the World Trade Bridge in Laredo. Click ahead to see which states would be the most and least affected by a Mexico-U.S trade war.


Texas would be the biggest loser if the U.S. waged a trade war with Mexico over President Donald Trump’s proposal to build a border wall and impose a 20 percent tariff on goods coming across the Rio Grande, according to a new report by WalletHub.

“If and when the president’s plan comes to fruition, experts predict it will trigger a trade war between our two nations. But the impact of the economic fallout will be different for every state,” the WalletHub report states.

Texas is the No. 1 trading partner in the U.S. with Mexico, making the state particularly vulnerable if the U.S. withdraws from the North American Free Trade Agreement, the report said. Arizona, Michigan, New Mexico and Kentucky round out the top five U.S. states, respectively, hit hardest by a trade war, according to WalletHub.

“The U.S. economy would suffer from withdrawing from NAFTA and would see an immediate impact on the prices for certain products,” added WalletHub.com analyst Jill Gonzalez in an email.

RELATED: In Mexico's NAFTA capital, 'absolute uncertainty' reigns

Roughly 37.7 percent of all exports from Texas go to Mexico, the biggest percentage among all 50 states. That represents 5.8 percent of the state’s gross domestic product, also more than any other state.
Texas gets more imports from Mexico than any other country, roughly 33.2 percent of all of its imported goods.

A trade war wouldn’t be likely to tip either country into an economic recession. “The likelihood of a recession is quite slim for both countries since they have other trading agreements with other countries, and the U.S. economy is quite stable,” Gonzalez said.

“However, a trade war with Mexico could impact U.S. agreements with other countries, as it could create global mistrust.”

Free Trade Alliance San Antonio CEO and President José Martinez said the findings were logical.

RELATED: Backlash against Trump's wall reaches Texas border city

Martinez questioned the report’s premise since Trump hasn’t rolled out specific details on a tariff or on how he wants to renegotiate NAFTA.

“I don’t think the United States will go into a trade war. We need to wait until the United States or Mexico takes a position,” Martinez said.

Since NAFTA went into effect in 1994, at least two disputes — over sugar tariffs and the blocked authorization of Mexican trucks to make U.S. deliveries — raised the possibility of a trade war, he said.

“Eventually, those settled down,” Martinez said.

RELATED: #AdiosProductosGringos threaten U.S. product boycott over Trump's border wall

One question that deserves attention is the U.S. trade deficit with Mexico, Martinez said. That’s the difference between the amount of goods exported to Mexico and the amount imported to the U.S. It was about $63.2 billion in 2016, billion according the Office of the U.S. International Trade Representative.

But the Mexico deficit is small when compared with the U.S. trade deficit with China, which was nearly $347 billion in 2016.

“I think this brouhaha with Mexico will be dwarfed when the argument shifts to China,” Martinez said.

Texas’ outsized export and import volumes with Mexico was predicted before NAFTA started.

RELATED: Border congressman condemns Trump's 'trade war' on Mexico

In a 1993 book titled “Continental Shift: Free Trade & the New North America,” author William Orme Jr. devoted a chapter to the “Tex-Mex Axis.”

Source: WalletHub


“NAFTA owes its political life to the Lone Star State. And for good reason,” Orme wrote. “The impact of Mexican trade on the American economy divides the United States neatly in two: Texas, and everywhere else. Mexico now accounts for about a third of total sales by Texas companies outside U.S. borders.”

Gonzalez said other options, besides a high tariff, exist to encourage the U.S. to produce goods domestically instead of outside the country.

“The best way to keep or establish production facilities in the U.S. is through an attractive tax environment supplemented with an easy-to-navigate policy system,” Gonzalez said.

http://www.mysanantonio.com/business...o-10915683.php

Today 2:39 pm

Canada says would respond if U.S. imposed new border tariffs

• REUTERS

OTTAWA (Reuters) - Canada strongly opposes the idea of the United States imposing new border tariffs and would respond appropriately to any such move, Foreign Minister Chrystia Freeland told reporters on Wednesday.
Freeland made her remarks after meeting new U.S. Secretary of State Rex Tillerson for the first time in Washington.

http://www.metro.us/news/canada-says...GaucYrJJYzV9g/

Originally Posted by Judy

We don't care. The price of wheat isn't our problem . . .

Feb. 8, 2017, 5:15 p.m. EST

The Next American Farm Bust Is Upon Us

0 Comments

By Jesse Newman and Patrick McGroarty | Photographs by Jesse Newman

RANSOM, Kan.—The Farm Belt is hurtling toward a milestone: Soon there will be fewer than two million farms in America for the first time since pioneers moved westward after the Louisiana Purchase.
Across the heartland, a multiyear slump in prices for corn, wheat and other farm commodities brought on by a glut of grain world-wide is pushing many farmers further into debt. Some are shutting down, raising concerns that the next few years could bring the biggest wave of farm closures since the 1980s.

The U.S. share of the global grain market is less than half what it was in the 1970s. American farmers’ incomes will drop 9% in 2017 , the Agriculture Department estimates, extending the steepest slide since the Great Depression into a fourth year.

“You keep pinching and pinching and pretty soon there’s nothing left to pinch,” said Craig Scott , a fifth-generation farmer in this Western Kansas town.

From his father’s porch, the 56-year-old can see the windswept spot where his great-grandparents’ sod house stood in 1902 when they planted the first of the 1,200 acres on which his family farms alfalfa, sorghum and wheat today. Even after harvesting one of their best wheat crops ever last year, thanks to plentiful rain and a mild winter, Mr. Scott isn’t sure how long they can afford to keep farming that ground.

Costs for seeds, fertilizer and equipment climbed so high and grain prices dropped so low that he still lost more than $120 an acre. Afraid to come up short again, Mr. Scott decided last fall not to plant 170 acres of winter wheat, close to a third of the usual amount. U.S. farmers sowed the fewest acres of winter wheat this season in more than a century.

“No one just grain farms anymore,” said Deb Stout , whose sons Mason and Spencer farm the family’s 2,000 acres in Sterling, Kan., 120 miles east of Ransom. Spencer also works as a mechanic, and Mason is a substitute mailman. “Having a side job seems like the only way to make it work,” she said.

She and her husband have declared bankruptcy before. Farmers around Sterling lost $6,400 on average in 2015, the latest available data, after profits of $80,800 a year earlier, according to the Kansas Farm Management Association.

Farming has always been a boom-and-bust enterprise. Today, the swings are sharper and less predictable now that the farm economy has become more international , with more countries growing food for export as well as for their own populations.

_{American farmers’ share of the global grain trade has fallen from 65% in the mid-1970s to 30% today,} giving them less sway over prices. More producers and more buyers around the world also mean more potential disruptions from bad weather, famine or political crisis.

Corn prices once varied year-to-year by less than $1 a bushel. Since 2006 they have shot up and dropped more than $4 a bushel.

A decade ago, a U.S. biofuel boom and China’s growing middle class lifted prices for crops like corn and soybeans. Many American growers spent the windfall buying land and half-million-dollar equipment.

The boom also encouraged farmers in other countries to ramp up production. Farmers world-wide put nearly 180 million new acres into cultivation over the past decade. Lower production costs, proximity to fast-growing markets and improving infrastructure gave some overseas farmers an edge.

Corn and wheat output has never been higher, and never has so much grain been bunkered away.

From the early 1800s until the Great Depression, the number of U.S. farms grew steadily as pioneers spread west of the Mississippi River. Families typically raised a mix of crops and livestock on a few hundred acres of land at most. After World War II, high-horsepower tractors and combines enabled farmers to cover more ground. Two decades ago, genetically engineered seeds helped farmers grow more .

Farms grew bigger and more specialized. Large-scale operations now account for half of U.S. agricultural production. Most farms, even some of the biggest, are still run by families.

Russia, meanwhile, has swung over the past quarter-century from the world’s largest wheat importer to the biggest exporter, said Dan Basse , president of Chicago-based research firm AgResource Co. Farmers there planted even more wheat last year to take advantage of the U.S. dollar’s recent climb against many currencies. That encourages Russian farmers to export as much wheat as possible for dollars, which convert to about twice the number of rubles they did three years ago.

The strong dollar also allows farmers in some countries to undercut U.S. prices.

“As the dollar stays strong, U.S. farmers don’t have a lever to pull,” Mr. Basse said. “It’s a slow bleed, not a cut to the jugular all at once.”

https://dynamic-insets.s3.amazonaws.com/graphics/narrator-48aa66c0-7525-4c53-9684-1ed3361d7bb9.json

The Obama administration last year accused China of unfairly subsidizing wheat production and improperly limiting grain imports to the detriment of U.S. farmers. The USDA in October said it would pay more than $7 billion in financial assistance under existing programs to help farmers survive the current downturn.

U.S. wheat exports last season were the lowest in almost a half-century, though government forecasters expect them to improve this year. Mr. Basse said he believes it won’t be economically viable for the U.S. to export wheat within five years.

Economists don’t expect the current slump to be as severe as the crisis that hit the Farm Belt in the 1980s. In those days, grain prices plunged following a rally in the previous decade that spurred farmers to expand production, amassing debt as a surplus grew.

Farmland values plummeted and interest rates soared, sparking a bust that forced many farmers and lenders out of business.

Farmland values are expected to hold up better this time. Farm incomes hit record highs as recently as 2013, leaving many growers with significant cash reserves. Interest rates, while expected to rise, are still near record lows. Although debt-to-asset ratios among U.S. farmers are projected to increase in 2017 for the fifth straight year, they also remain historically low.

Costs for farm supplies like fertilizer have fallen, and economists foresee increasing pressure on seed prices and land rental rates. The crunch could ease if bad weather curbs harvests, lifting demand for America’s excess grain. Fewer rural communities rely economically on agriculture today, which could help insulate them from the downturn.

For some, the slump is an opportunity. Farmers with low debts and enough scale to profit from last year’s record harvests could be in a position to rent or buy up land from struggling neighbors.

Lee Scheufler , 65, has expanded his farm in Sterling nearly 10-fold over the years, starting with 600 acres four decades ago. Having squirreled away money during profitable years, he recently bought and rented higher-quality land to replace some of his weaker holdings.

“We tried to position ourselves for when the other shoe drops,” said Mr. Scheufler, adding that someday he would like to pass on his land to a younger grower just beginning to farm, like a neighbor did for him.

One chilly afternoon in October, Mr. Scheufler steered his combine across the first field he bought. The machine’s giant claw spun through rows of golden soybeans. A hawk circled the combine’s wake, hunting for exposed field mice. He recalled farmers whose land he has taken over: Ted Hartwick ’s, the Matthews’, the Profits’, his father’s. “Each property has its own history,” he said.

In the late 1970s, he joined thousands of farmers in Washington for a demonstration urging the government to address low grain prices and farm foreclosures. As some drove their tractors onto the National Mall, his group rang a bell every five minutes to symbolize the rate at which farms were closing. He has been reminded of those days often this year.

“The potential for a big crisis is real,” he said. “If things stay similar to how they are now, you haven’t seen anything yet.”

In Ransom, Mr. Scott has resorted to government assistance to guarantee himself some income. He placed 170 acres in a government conservation program that pays farmers to plant fields with grass rather than crops. That seemed like his only choice after spending about $6.50 a bushel on seed, fertilizer, fuel and pesticides to grow wheat last year only to earn $2.90 a bushel. During planting season last fall, he and his 82-year-old father cut back on fertilizer and coaxed one more crop out of a 20-year-old chemical sprayer with a worn-out engine.

Many of his peers have given up. There were 28 students in Mr. Scott’s graduating class at Ransom’s high school nearly four decades ago. Most were farmers’ children. This year there are nine students in the school’s senior class. “Farms got bigger to be more efficient, but it’s caused these towns to die a slow death,” Mr. Scott said.

Monty Roth ’s Loaves n’ Fishes cafe was barely profitable last year. He said he might close it this month if sales don’t improve. Oil, the other big business in Ransom, has been battered by the drop in crude prices since late 2014. Most oil workers have left town.

In Great Bend, 80 miles east of Ransom, Les Hopkins recently sold his John Deere dealership after sales all but stopped. He is owed about $100,000 by farmers who financed machinery purchases they haven’t paid off. He has tried tracking them down by calling from cellphone numbers they won’t recognize. “That money is gone,” he said.
Bankers say many farmers are burning through savings to stay in business. They expect some to retire rather than lose more money. Young farmers without much savings are vulnerable, as are large growers who racked up debt to expand operations.

Some locked into multiyear land leases at high rents.
The motor on David Radenberg ’s tractor gave out last fall as he sowed wheat on his family’s 2,400 acre farm in Claflin, 90 miles east of Ransom. He didn’t have the money to fix it.

“You want to cry when you find out how much it costs,” he said. He decided to sell the tractor for $10,500 and rely on an older model. If grain prices remain weak, the farm could be next. After 30 years farming, this crop could be his last: “Do I go work at Wal-Mart as a greeter or as a parts man at the mechanics shop?”

https://secure.marketwatch.com/story...-08-1125425560

Originally Posted by Judy

Everyone in our country would benefit. There are no losers to this. Same as there are no losers from the FairTax, except illegal aliens who lose big and countries that we have trade deficits with because the FairTax helps correct both problems in addition to setting Americans free of tax returns and income tax reporting resulting in hundreds of billions of dollars every year in compliance savings and increased productivity.

JUST DO IT!!

FairTax now because this IS a 23% "border tax" on every product or service imported into the US that results in a final retail finished goods sale in the United States.

FairTax Act of 2017, HR 25 in the US House of Representatives and S 18 in the US Senate. Pass it now House and Senate Republicans, it's the best single piece of economic development legislation ever presented to the US Congress.

http://www.fairtaxfraud.com/fallout.asp