Author: Jack
POSTED ON 10 Jun 2019

Trump Administration Calls Off Tariff Plans – For Now

President Trump, via his favorite medium for communicating to the world, announced that the United States and Mexico have “reached a singed agreement” and that the tariffs he had threatened to impose against Mexico” are hereby indefinitely suspended. He continued by stating that “Mexico, in turn, had agreed to take strong measures to stem the tide of Migration through Mexico, and to our Southern Border to greatly reduce or eliminate, Illegal Immigration coming from Mexico and into the United States. Details of the agreement will be released shortly by the State Department.” He did leave a cliff hanger that if they feel as if Mexico isn’t holding up its end of the deal, then the tariffs action will continue as planned.

What this means for the automotive industry is it can let out a sigh of relief – but it’s not out danger yet. You see, that “if” presents a lot of uncertainty to the equation and uncertainty doesn’t mix well in the automotive industry where long-term planning is required for development, building, and selling vehicles. If the administration all of a sudden decides to implement the tariffs, it will certainty be an unexpected decision (as is most of Trumps moves). This makes it virtually impossible to predict if a manufacture is going to have to plan for tariffs or not. The result are companies will more than likely play it a bit more conservative with their spending in terms of developing and expanding – which in turns slows down the potential growth.

Let’s hope there won’t be any reneging on this deal.