Good news -- Trump is no longer threatening to crash our economy this weekend by completely closing our southern border with Mexico, but he is toying with the idea of crashing our economy further down the road.
Auto industry representatives who sounded the alarm by saying the entire industry could be idled if the border is closed may not be pleased to learn that Trump may just single them out for punishment.
From the Associated Press:
In his latest backtrack in recent days, Trump told reporters Thursday he would try the “less drastic measure” before resorting to his standing border-closure threat.
“Mexico understands that we’re going to close the border or I’m going to tariff the cars. I’ll do one or the other. And probably start off with the tariffs,” Trump said. He added later: “I don’t think we’ll ever have to close the border because the penalty of tariffs on cars coming into the United States from Mexico, at 25 percent, will be massive.”
Trump also told reporters that he would impose additional tariffs next year if Mexico doesn't stop the flow of drugs, whatever that means, but I don't think anyone is actually taking that threat seriously.
I would like to say we shouldn't take his threat to impose tariffs on foreign cars and parts seriously, but we have to. You may recall that the Commerce Department recently gave Trump a green light to impose tariffs on foreign cars and car parts. Trump has not acted on the Commerce Department's recommendation yet, but he could at almost any time.
If Trump ever does impose a 25 percent tariff on foreign cars and parts, you can kiss our relatively-healthy economy goodbye. Even if you're not in the market for a new vehicle, the cost of maintaining the one you have will skyrocket. Automakers will cut jobs, dealerships will close, the cost of shipping and everything that gets shipped will increase, the cost of groceries will increase, and retaliatory tariffs will hit other industries.