[supershaft]

Originally Posted by CarlosM4

Unlikely. More tariffs = more money for the government. Given how broke and in debt the US government (all governments truth be told) don't expect it to be rolled back.

Yeah the government isn’t a mom and pop business. The US is in a unique position for being the reserve currency they can kind of print their way out of debt because our economy is not only stable but grows so US treasury bonds are extremely attractive. Tariffs and severing global economic ties allows china to dominate and eventually dethrone America being a financial juggernaut

But I’m sure the government being “broke” is the right way to understand it 😂

[Bluex]

Originally Posted by masd79

Go get one sitting at a dealership today and enjoy the positive equity Monday ..a friend went and grabbed a $95k i5 m60 for $700/month with zero down, I saw a frozen one sitting on the lot collecting pollen. They said they would give you a huge discount if anyone asked interested. Dm me

Well, if the news coming from BMWNA isn't what I (and many others) are hoping for then I may have to go that route, but I suspect those previously "collecting pollen" M5's will move off the lots by then.

[CarlosM4]

Originally Posted by CarlosM4

Unlikely. More tariffs = more money for the government. Given how broke and in debt the US government (all governments truth be told) don't expect it to be rolled back.

Originally Posted by supershaft

Yeah the government isn’t a mom and pop business. The US is in a unique position for being the reserve currency they can kind of print their way out of debt because our economy is not only stable but grows so US treasury bonds are extremely attractive. Tariffs and severing global economic ties allows china to dominate and eventually dethrone America being a financial juggernaut

But I’m sure the government being “broke” is the right way to understand it 😂

There is a limit in which you can "print" your way out of it. Crypto and the rise of other currencies is there to prove that scenario. Dollar not being backed by anything and printed into oblivion, will eventually succumb the system. And many in the government know. Carrying a shit ton of debt held by foreign countries, is also extremely risky.

And to be honest, China has already dominated and beaten the US.

[supershaft]

there's a limit? Do tell what it is because america has been printing for the last 30 years without penalty. Which other country in the world enjoys the hegemony that america does? the dollar is not being backed by anything? where do you even get your information from?

if you think crypto is going to replace hard backed currency now i know you aren't serious. carry on with your AI generated nonsense.

[iifymbro]

Originally Posted by Bluex

Well, if the news coming from BMWNA isn't what I (and many others) are hoping for then I may have to go that route, but I suspect those previously "collecting pollen" M5's will move off the lots by then.

I can't imagine dealers would be willing to let a lot M5 go at msrp or below at the moment anyway

[CarlosM4]

Originally Posted by supershaft

there's a limit? Do tell what it is because america has been printing for the last 30 years without penalty. Which other country in the world enjoys the hegemony that america does? the dollar is not being backed by anything? where do you even get your information from?

if you think crypto is going to replace hard backed currency now i know you aren't serious. carry on with your AI generated nonsense.

Keep believing in that.

And you took one part of my argument and added something I haven't said (crypto will not surpass hard backed currency), but its mere existence is there for a reason.

I will not delve into any more detail.

[supershaft]

Originally Posted by CarlosM4

Keep believing in that.

And you took one part of my argument and added something I haven't said (crypto will not surpass hard backed currency), but its mere existence is there for a reason.

I will not delve into any more detail.

good

[Bluex]

Originally Posted by iifymbro

I can't imagine dealers would be willing to let a lot M5 go at msrp or below at the moment anyway

2 days ago, hell yes they were. Today, hell no, I can't fathom any dealer that knows they will be facing 25% tariffs letting anything existing on their lot go for less than msrp. People that don't want to be pigeonholed into buying non-tariff affected cars will snatch what's left on lots, new and used. Basic supply and demand capitalism stuff. "Get em while you can folks!! Last chance before prices go up!"

[Crazy1323]

I think BMW and other automakers know that they will not be able to pass the full import price on to consumers. It will be a balancing act of supply an demand.

When BMW sells a car in the US it includes maintenance and warranty for the first 4 years. With this tariff applying to auto parts that means that fulfilling that service and warranty contract will be more expensive than BMW estimated when they sold the vehicle.

Also, the tariffs are based on the import price, not the MSRP. The import price is like the wholesale cost.

So price increases to the consumer will come from three areas:
1) increased MSRP to cover import tariffs on vehicle and increased cost to manufacturer of warranty/service work.
2) increased service/repair work for items not covered by warranty or consumables nor made in US.
3) Increased insurance costs as repairs costs and replacement costs increase with these tariffs.

It will be a balance based on how elastic demand is to see how much of the increases can be passed onto consumers.

I will say this, since the 60’s there has been a 25% import tariff on light duty trucks and cargo vans called the “chicken tax”. To my knowledge there are currently zero vehicles imported that would be subject to this tariff. I think the last was the Mini Clubvan in 2013 and they were only able to sell like 50 of those.

Having said that, it shows that a 25% tariff on the importation of vehicles historically has resulted in a cessation of the purchase of those vehicles in the US.

[Crazy1323]

Originally Posted by soulsea

Fwiw, this is what Ferrari is doing for now. They'll eat the entire tariff on some models and increase 10% on others whilst eating the other 15%. How long they can sustain this is unknown.

I'm guessing all these import heavy companies will do something similar in the short term.

Ferrari is not “eating the other 15%”. The 25% tariff is based on the declared value of the vehicle, not the MSRP. This is the price that Ferrari North America pays Ferrari in Italy for the vehicle. The vehicle is then sold for a higher price by Ferrari NA to the dealer for Ferrari NA to profit. Next the vehicle is sold at a higher price to the consumer for the dealership to make a profit.

So, if a vehicle has a $200k MSRP and gets a 10% increase then it has an MSRP $220k. So $20k more. If the declared value on that car when imported was $120k then the incremental tariff would be $30k.

While it sounds like Ferrari ate well over half the tariff, 15% out of 25%, in actuality the consumer covered 2/3rds of the tariff (20k out of 30k) and the other 1/3 would be absorbed by Ferrari.

[Young04]

Originally Posted by Crazy1323

Ferrari is not “eating the other 15%”. The 25% tariff is based on the declared value of the vehicle, not the MSRP. This is the price that Ferrari North America pays Ferrari in Italy for the vehicle. The vehicle is then sold for a higher price by Ferrari NA to the dealer for Ferrari NA to profit. Next the vehicle is sold at a higher price to the consumer for the dealership to make a profit.

So, if a vehicle has a $200k MSRP and gets a 10% increase then it has an MSRP $220k. So $20k more. If the declared value on that car when imported was $120k then the incremental tariff would be $30k.

While it sounds like Ferrari ate well over half the tariff, 15% out of 25%, in actuality the consumer covered 2/3rds of the tariff (20k out of 30k) and the other 1/3 would be absorbed by Ferrari.

Do we know what the difference between the declared value of BMWs for tariff purposes and the MSRP is? They already pay a 2.5 percent tariff so I imagine this info is somewhere.

[Crazy1323]

Originally Posted by Young04

Do we know what the difference between the declared value of BMWs for tariff purposes and the MSRP is? They already pay a 2.5 percent tariff so I imagine this info is somewhere.

I don’t know if that information is publicly available, but it wouldn’t surprise me to see the declared value be about 60% of MSRP.

[Cannondale900]

Originally Posted by Crazy1323

Ferrari is not “eating the other 15%”. The 25% tariff is based on the declared value of the vehicle, not the MSRP. This is the price that Ferrari North America pays Ferrari in Italy for the vehicle. The vehicle is then sold for a higher price by Ferrari NA to the dealer for Ferrari NA to profit. Next the vehicle is sold at a higher price to the consumer for the dealership to make a profit.

So, if a vehicle has a $200k MSRP and gets a 10% increase then it has an MSRP $220k. So $20k more. If the declared value on that car when imported was $120k then the incremental tariff would be $30k.

While it sounds like Ferrari ate well over half the tariff, 15% out of 25%, in actuality the consumer covered 2/3rds of the tariff (20k out of 30k) and the other 1/3 would be absorbed by Ferrari.

Agree - There will be a lot of transfer pricing adjustments between the involved parties to find a new balance.

[Salespunk]

Likely that this will hit for a day or two and then be rolled back only to hit again 30 days from now.

Elon's and therefore Trump's policy is to move fast, break stuff then fix whatever is broken to find the limit. Exactly what happened at X and how SpaceX operates. Problem is that this creates massive uncertainty across the economy. Do I buy an M5 right now, order what I want, be patient and wait for things to calm down or just hoard money.

A significant portion of the people that have a choice will just hoard money right now. This will lead to a slowdown in the economy as well as significant inflation ($20 Happy Meals anyone?). Remember that a lot of economic activity is driven by the top 5% of earners right now since we are the ones buying M5's, TV's and other discretionary purchases. So far we have been able to absorb the price increases, but if there is uncertainty we will cut off spending overnight. There is already evidence that this is happening in this cohort.

BTW I paid $9.90 for a Happy Meal for my wife yesterday. Pretty ridiculous and if you are scraping by there is no way even this small purchase is reasonable.

[Bluex]

Originally Posted by Salespunk

Elon's and therefore Trump's policy is to move fast, break stuff then fix whatever is broken to find the limit. Exactly what happened at X and how SpaceX operates. Problem is that this creates massive uncertainty across the economy. Do I buy an M5 right now, order what I want, be patient and wait for things to calm down or just hoard money.
.

Quite honestly, you've hit on something here because that's exactly what it's done to me. I was 100% all set to pay for my M5 when it arrives (in cash no less) and now i'm quadruple guessing my decisions because I just don't know wtf is going to come around the corner anymore.

I'll 99.9% still get it if BMW price protects my order, but that uncertainty has crept in there where before it didn't exist, for sure.

[soulsea]

Originally Posted by Crazy1323

Ferrari is not “eating the other 15%”. The 25% tariff is based on the declared value of the vehicle, not the MSRP. This is the price that Ferrari North America pays Ferrari in Italy for the vehicle. The vehicle is then sold for a higher price by Ferrari NA to the dealer for Ferrari NA to profit. Next the vehicle is sold at a higher price to the consumer for the dealership to make a profit.

So, if a vehicle has a $200k MSRP and gets a 10% increase then it has an MSRP $220k. So $20k more. If the declared value on that car when imported was $120k then the incremental tariff would be $30k.

While it sounds like Ferrari ate well over half the tariff, 15% out of 25%, in actuality the consumer covered 2/3rds of the tariff (20k out of 30k) and the other 1/3 would be absorbed by Ferrari.

I didn't say 25% of msrp.

I don't know Ferrari's internal corporate structure. My understanding is that PAG sells their cars to its subsidiary PCNA, PCNA sells them to the dealers, and the dealers sell them to the customers. Maybe Ferrari has the same structure with FNA. None of us, including yourself know what the invoice of any imported car (or part) is into the US, that is completely dependent on the corporate structure of each manufacturer and the applicable international accounting repatriation laws are for their profits. US companies have $6 trillion dollars in profits sitting abroad cause it's punitive to bring that money home ... there's a bunch of accountants and algorithms in Europe and Asia that structured their businesses accordingly, and are now recalculating everything as we speak to accommodate for the tariffs. I suspect that it's not as easy as discounting the declared sale at import to cancel out the tariffs and there are costs associated with taking from one hand to give to the other at the back end.

The point I was making was that each company has or will choose to eat some portion of the tariff, and they will pass the rest along to the customer, and again, I never said it will be relative to msrp.

[Crazy1323]

Originally Posted by soulsea

I didn't say 25% of msrp.

The point I was making was that each company has or will choose to eat some portion of the tariff, and they will pass the rest along to the customer, and again, I never said it will be relative to msrp.

I read Ferrari’s announcement as they will be raising the MSRP by 10%, so I wasn’t sure what you meant by “the other 15%”.

Either way, I think we are saying the same thing. At a macro scale, there isn’t an incremental cost to the consumer of 25% of the MSRP. It is some amount less than than based on the transfer pricing of these international companies, and I agree we will probably never know what that incremental cost is. Manufacturers will try to pass on as much of that incremental cost as consumers will tolerate, but will likely have to absorb some themselves.

[Crazy1323]

Originally Posted by Cannondale900

Agree - There will be a lot of transfer pricing adjustments between the involved parties to find a new balance.

Which should be really run when they already have Advanced Pricing Agreements in place. Those can take 4-5 YEARS to negotiate with tax jurisdictions!

[Skilly]

This seems random and without a plan, but I think think its fully planned. It's all a giant scam to redistribute cash into the hands of the government and in turn pumped out to the top for tax breaks. Thats it - a short term raid at the expense of the consumer.

The idea that this will bring jobs back to the US is a farce too. If anything it will skyrocket inflation which will raise interest rates, which will slow buying even more, which will limit capital required to create the infrastructure to build out for US made alternatives.....

Tariffs without a careful plan dont work.

As our strongest allies now reroute their own trade routes as the US is seen as untrustworthy, this will take years to unravel.

[evanevery]

Raising the prices (via tariff) on imports to help give domestic production a leg up only results in domestic producers simply raising their prices to meet the market and taking quick and easy short-term profits.

This is exactly what happened when the same administration put import taxes on steel and aluminum 8 years ago. I buy raw steel for various projects and the very "blue collar" steel supplier I work with was quite "upset" about how the tariffs did absolutely nothing but raise the prices from the domestic producers as well. ...and still no improvement in production infrastructure or long term decrease in cost.

Why re-invest when you can keep your stockholders (and donors) happy with nice fat short-term profit taking?

[jm490]

Originally Posted by Bluex

2 days ago, hell yes they were. Today, hell no, I can't fathom any dealer that knows they will be facing 25% tariffs letting anything existing on their lot go for less than msrp. People that don't want to be pigeonholed into buying non-tariff affected cars will snatch what's left on lots, new and used. Basic supply and demand capitalism stuff. "Get em while you can folks!! Last chance before prices go up!"

I have a broker who has 10% off on a G90 as of today and my regular dealer in NJ which is very high volume at that of 15 years sold my brother a 131k G90 for I think 124k it was. 5k down 1859 12k miles including rim and tire. They may say the tariffs are going to affect everyone immediately but they have a lot of these sitting around. Go get them now while you can with a discount. I do believe that it will stop soon but as of today they’re still trying to get rid of them. I think they know a a quiet recession is potentially in the works. But idk that’s above my pay grade.

[Bluex]

Originally Posted by jm490

I have a broker who has 10% off on a G90 as of today and my regular dealer in NJ which is very high volume at that of 15 years sold my brother a 131k G90 for I think 124k it was. 5k down 1859 12k miles including rim and tire. They may say the tariffs are going to affect everyone immediately but they have a lot of these sitting around. Go get them now while you can with a discount. I do believe that it will stop soon but as of today they’re still trying to get rid of them. I think they know a a quiet recession is potentially in the works. But idk that’s above my pay grade.

Appreciate the heads up.

My CA texted me yesterday after waiting to hear how his GM’s meeting with BMWNA on this subject…two words: “you’re safe”

So someone will be eating the tax, but it won’t be me. But I think that this is merely because my car is scheduled to leave Bremerhaven tomorrow. (My guess…he wouldn’t give me a reason)