How Trump helps German automakers by pushing China's tariff cut

Yahoo Finance ^ | 11 April 2018 | Krystal Hu

[Berlin_Freeper]

The timing seems perfect — President Donald Trump tweeted about the “stupid trade” between China and U.S., in which American cars face a 25% tariff when sent to China while Chinese cars coming to the U.S. are subject to a 2.5% tariff. Within 24 hours, China’s President Xi Jinping told the world that China will “significantly lower the tariff on imported vehicles” this year during his speech at Boao Forum for Asia.

While Trump applauded the move with a new tweet, it’s not a done deal as China just proposed retaliatory tariffs of 25% on U.S. cars if the U.S. ever imposes tariffs on Trump’s target list of Chinese imports. But if China imposes a reduced tariff on imported vehicles, U.S. carmakers like Ford (F) and GM (GM), don’t stand to benefit that much — German automakers will.

[Berlin_Freeper]

European shares rise after China's Xi backs away from trade war
"We would see this as a major step towards opening the Chinese economy and to easing the very tense trade atmosphere ... The primary beneficiaries would be German carmakers and the German economy as a whole," Evercore ISI analysts wrote.

Germany's BMW rose 1.9 percent and Daimler was up 1.2 percent, while Volkswagen surged 4.5 percent.

[GoldenState_Rose]

Trump helps everyone. Seriously.

[Berlin_Freeper]

President Trump said trade wars are good and easy to win. Took only a day.

[Fraxinus]

How much spare production capacity is there actually in automobiles? How flexible is the demand? Short term if the Chinese start buying a lot of German autos, that will mean there are fewer German autos going to the rest of the world allowing US automakers to sell more car to those countries with reduced availability of German autos. Better to be a Ford dealer in India with stock than a BMW dealer with no stock to sell.

This could turn out to be much like the soybeans caper. China decided to buy the Brazilian Crop instead of the US crop, so the EU who had traditionally bought the Brazilian crop bought the US crop instead.

[Jim Noble]

See - Drumpf is a Nazi after all /s

[Cobra64]

Hey jerk. Learn how to post images in a responsible and considerate manner.

[GoldenState_Rose]

Chinese are smart. On the trade war front.

Now lets see if Russia will be the same on the other front.

[Berlin_Freeper]

Oh?
What happened there?

Was there a typo that caused your little potato to konk on you, jerk?

[Berlin_Freeper]

Hey jerk. Learn how to post images in a responsible and considerate manner.

You have got to be kidding me... I recreated a preview and the image was 120% bigger than my HD screen. You wasted the time of a moderator for that?!

I didn't detect the large size because I posted from my new 12.9‑inch iPad Pro which automatically scaled the image to the screen size. Maybe if you had an employable attitude you would not be crashing on your potato that your mom bought you back in 1990.

Here it is so you don't miss out:

Gold still the standard for Germans

[Berlin_Freeper]

Here, start planning your welfare budget:

The Best Cheap Desktop Computers of 2017

[Cronos]

I believe there is a lot of spare production capacity

it also depends on what type of cars the Chinese will buy -- premium, mid-range or general cars

in case of general cars, then the Japanese, Koreans, Fiat, Volkswagen, Renault-nissan have an advantage

If the Chinese start buying a lot of German high-end autos, they will ramp up -- and the fact is that American luxury autos (Lincolns and Cadillacs) are unable to compete with the Germans (Audit, BMW, Merc) or even with the English (Jaguar) or Japanese (lexus) marks

American muscle cars are in a league of their own

In the case of India as in your example, Ford and BMW don't compete for the same customer at all.

[RegulatorCountry]

You don’t know the Chinese and their auto buying preferences. They love Buicks. Makes no sense to the rest of the world, perhaps, but love Buicks they do.

[Cronos]

In the trade war case, what T is doing is correct. My fear is that it is a bit too late to moderate China's rise.

That doesn't mean he shouldn't do it, nor that the USA will not get a benefit from this, but that the USA's absence from the world under Obama and Bush's concentration on the ME meant that China was able to rise to hubris

[Cronos]

true I don't - but I do know that Buicks are higher end than Cherry's or hyundai or Ford in China, but don't compete with the BMW types

I don't see much of Mercedes A series or BMW's smaller cars around China.

[RegulatorCountry]

They buy their own cheap cars. Foreign makes are status. The Buicks of China are not the Buicks of the rest of the world, they’re much more of an executive car.