Trump Mulls $10,000 Tax on Most New Cars

Toyota Motor Corporation

Here’s the latest deep thought from the Trump administration:

Officials may cite national security grounds to justify a 25 percent tariff on imported vehicles, a senior administration official said….An announcement of a formal investigation into the purported need for such industrial protection could come as soon as Wednesday evening, one industry executive said.

Wednesday evening, the White House announced that Trump had directed Commerce Secretary Wilbur Ross to consider launching a formal investigation of the possible need for such industrial protection. Eighteen minutes later, Ross said he had done so. “Core industries such as automobiles and automotive parts are critical to our strength as a Nation,” the president said.

What’s next? A national security exemption for avocados and bell peppers? Pharmaceuticals? Diamonds? With the process now in hand, it shouldn’t take Ross more than ten minutes each to declare them a key military requirement.

Anyway, this is not going to happen. Can you imagine the howls from Trump’s rich voter base when they suddenly have to pay more for their BMWs, Porsches, and Jaguars? I’m reminded of this famous presentation from Ross a couple of months ago defending the new tariffs on steel and aluminum:

The price of a can of Campbell’s soup would only go up six-tenths of a cent! But what’s he going to do now? Haul in a Porsche on a crane and declare that a 25 percent tariff would only raise its price by a paltry $30,000? And what about the other end of the Trump base? They’re going to have to shell out an extra $10,000 for their Toyota Tundras and Nissan Armadas. That’ll do wonders for Republicans in the upcoming midterms.

So it’s not going to happen, and everyone knows it’s not going to happen. What possible negotiating benefit can this provide? It’s like trying to bluff on a low pair while your cards are laying up on the table. As usual with Trump, this is just another mysterious emanation from deep within his lizard brain. Nobody knows what it really means.


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