Toyota is the latest non-American-brand car company to respond to President Trump’s tariff regime by stating it will build more vehicles in America. Hyundai is another. But will this do anything to make vehicles more affordable for Americans?
Or will it make them even more expensive than they already are?
Will the cost of labor go down – or will it remain the same? How about regulatory compliance costs? Is President Trump doing anything to reduce them? He did say recently he does not want to increase them – as was set in motion during the four year “administration” of his predecessor. (As an aside, it is interesting to consider the almost-always-blandly-euphemized language of government. An “administration” sounds unthreatening, like being “asked” to “contribute” funds you are forced to hand over.)
Trump said he wants to “go back” to the regulatory regime that existed in 2020 – the last year of his first term. His successor took that ball and ran with it. Among other things, he nearly doubled federal fuel economy mandatory minimums from the roughly 35 miles-per-gallon in place back in 2020 to roughly 50 miles-per-gallon by 2030, thereby imposing a de facto EV mandate since only EVs (and small hybrids) can comply with a 50 MPG federal mandate.
It is a good thing – in that it is a less onerous and even catastrophic (to vehicle affordability) thing – that Trump wants to “get back” to the regulatory regime in effect back in 2020. But this will not reduce the cost of new vehicles except insofar as it prevents them from increasing even more.
The point being that even if we do “go back” to that 2020 standard, the best that can be expected is a kind of status-quo holding action, insofar as the cost of vehicles. Including those made in America – which will not be exempted from the 2020 compliance regime. If anything, a Toyota or Hyundai made in America is likely to cost more because it will cost more for Toyota and Hyundai to make vehicles in America – because they will have lost the advantage of lower-cost manufacturing that they had when they manufactured them elsewhere, where compliance costs are – were – lower.
In other words, Toyota and Hyundai and all the others will have no choice but to price their vehicles to reflect manufacturing costs right here in the USA – and unless those costs are reduced, Americans will pay more for vehicles made in the USA to cover compliance costs of made-in-the-USA. It may give some of them satisfaction to know that Americans are being paid to make those cars – but that is neither here nor there as regards the affordability of cars.
And if few can afford to buy what is manufactured it will not be long before those “American jobs” disappear. Everyone loses.
There is another factor that is driving this. One that is rarely talked about – probably because it not something Trump is interested in doing something about (this assumes he has any power to do anything about it). It is the thing that is – once again – blandly styled “inflation.” As if it were a natural, inevitable thing that the money we’re forced to use just loses value – purchasing power – over time. Kind of like we go gray over time.
Americans are so PTSD’d about this that they have become used to it as a normal thing, like being forced to wear “masks” – and being forced to spread your legs prior to being allowed to proceed to the gate at an airport. They just accept that everything they need – including vehicles – “costs more” today than it did yesterday.
Which of course it doesn’t. It just seems to – because it takes more money to buy the same things today than it did yesterday. That is not the same thing as costing more – and if more Americans only understood this crucially important distinction, it would be much easier to address the problem that the president – for all his good intentions, if we wish to assume them – seems to be unwilling to address. Indeed, it is very arguable – because it’s hard to logically argue the contrary – that Trump is personally responsible for pouring gas on the “inflation” fire by flooding the economy with what were styled “stimulus” checks during the first year of the “pandemic emergency” he also declared during the last year of his first term.
They were indeed “stimulating.”
Of prices, which shot up – because there was more money (created out of thin air) chasing fewer things, including cars. Over just three years, from roughly 2021 through 2024 – the average price paid for a new vehicle increased to $50,000 from $35,000 and while not all of that is due to “inflation,” a great deal of it absolutely is. Just the same as the price you pay for groceries is largely due to this attenuation of the purchasing power of money.
Trump – in his defense – has little power to do much about this as the money supply is not under his control. It is controlled by this strange thing called the “Fed” – another example of government euphemizing what it does. Though – to be fair – in this instance, it is done to government, which is in a very real sense owned by this strange thing called the “Fed.”
Which is in fact as “federal” as Fed Ex.
The “Fed” is in fact a cartel of private banks that operate outside federal control – in any meaningful sense. The “Fed” has never been audited. It will never be audited. The Fed has the ability – the power – to decrease the purchasing power of money by issuing more of it. In other words, it has the power to rob each and every one of us our wherewithal to buy things and to accumulate wealth.
Will Trump do anything about that?
Is there really such a thing as the big rock candy mountain?
So it looks like maybe more vehicles will be made in America. Whether Americans will be able to afford to buy them is another matter.
. . .
If you like what you’ve found here please consider supporting EPautos.
We depend on you to keep the wheels turning!
Our donate button is here.
If you prefer not to use PayPal, our mailing address is:
EPautos
721 Hummingbird Lane SE
Copper Hill, VA 24079
PS: Get an EPautos magnet or sticker or coaster in return for a $20 or more one-time donation or a $10 or more monthly recurring donation. (Please be sure to tell us you want a magnet or sticker or coaster – and also, provide an address, so we know where to mail the thing!)
If you like items like the Baaaaaa! baseball cap pictured below, you can find that and more at the EPautos store!
We given foreigners dollars, they give us stuff.
Those dollars are then used to buy stuff form us and fund the debt.
If price goes up or more money is spent in the US making the products, there will be less overseas dollars to fund our borrowing.
What will the outcome of that be? Money printing & dollar devaluation?
If so, then the prices will rise due to inflation and less of us will buy expensive items, and less $ will be available to fund that debt, which could result in more printing.
There could be other outcomes, but this would be a bad one and I don’t see Trump balancing budgets any time soon.
Invoking the family motto:
“Don’t expect much that way you won’t be disappointed”
The Georgia Peach on the business channel just now eviscerating the RINOs in Congress as now they’re wavering on cutting the waste in Medicaid. These weaklings still cower in fear of the Press spin “cutting medical for poor people” vs the truth about cutting actual fraud.
So not much is going to be different going forward. Not enough in gov with the guts to do something positive- they’re a few but no where near enough to reach critical mass for sustained meaningful change. Court system a lost cause, last straw the Supremes 7-2 on pausing deportation. Jesus. Feds can’t even get Daylight Savings Time repealed.
Commander says I should be more positive – “OK, I’m positive we’re doomed”
Trump does not question government’s authority to dictate such regulations. He just states that he wants to dial them back as a temporary favor to the little people.
Too many folks are not buying their crap..
So just saving face by using the ‘two steps forward one step back’ technique.
Reading Eric’s other article today ‘An Eye Opening Event’ tells me everything I need to know about these people. Evil and dangerous.
“Give me control of a Nation’s money, and I care not who makes it’s laws…” – Amschel Mayer Rothschild, c.1750
The people of the USA, and Trump, and their monies, are owned by the Khazarian Mafia.
Until that’s fixed, like the French did about 1791, the economy will continue to slide down, down, and down….
YMMV…
Toyota has already moved quite a lot of production to the U.S. They have been for decades, since the joint venture NUMMI with GM in Fremont, CA. One of the drivers behind NUMMI was to get around the chicken tax our government put on import trucks. Toyota made Hilux (called just Pickup in the U.S.) there starting in 1992 and eventually made Tacomas, which moved to San Antonio and now Mexico. Ironically they made Teslas there now.
Toyota’s philosophy is to make cars locally for all their markets, where that’s possible. For example, they make various versions of Corollas in U.S. (Mississippi and Alabama), Japan, Turkey, Thailand, China, Malaysia, Brazil and South Africa.
They make their core U.S. vehicles domestically (if you include Canada and Mexico especially). The Sienna, Tacoma, Tundra, Corolla, Camry, Highlander, RAV4, Sequoia. The Land Cruiser and 4Runner are still made in Japan. As are Prius and most Lexus I think. Some of that is due is probably due to sales numbers. There’s historically no reason to make Land Cruiser in the U.S. when they sell a few thousand a year. The new 250 series might change that. The Lexus is probably due to quality and volume, a few models that are really rebadged Toyota are made in the U.S. but for their high end models I suspect they still don’t trust Americans to build them.
If prices of new vehicles are too high or not affordable, sales will decrease. The nature of the beast, elastic market drive, an economic term, translates to a downturn in sales of an item, like a car.
Boil that cabbage down.
Mazda and Toyota have US presence in Huntsville, Alabama. Only two models, C50 and the Corolla are built there.
Humpty Trumpty sat on a wall
Humpty Trumpty had a great fall
All the King’s horses and all the King’s men
Couldn’t put Humpty back together again
Part of the problem (which is intended) is that the goalposts keep getting moved on automotive mandates. Assume for a moment that the mandates for MY 2000 could be frozen in time. Think about how cheaply and efficiently that type of car could be manufactured after 25 years of perfecting the processes. Instead, all of the plans and development knowledge and experience has to be thrown away for a newly mandated design every couple of years.
‘The point being that even if we do “go back” to that 2020 standard, the best that can be expected is a kind of status-quo holding action.’ — eric
Precisely. This is the foundational ethos of the R-party: Mend, Not End.
It was on display last weekend, as hundreds of US troops abandoned their illegal bases in eastern Syria where, like marauding pirates, they steal oil.
But a core force of yankee occupiers will remain in Syria — just in case ‘our best friend in the whole world’ orders an Obama-style ‘surge’ after they bomb, bomb, bomb Iran.
Well, come on all of you big strong men
Uncle Sam needs your help again
Yeah, he’s got himself in a terrible war
Way down yonder in Deir ez-Zor
So put down your books and pick up a gun
Gonna have a whole lotta fun
And it’s one, two, three
What are we fighting for?
— Country Joe & the Fish, I Feel Like I’m Fixin’ To Die
Israel is our misfortune.
ZeroHedge headline this morning:
Knives Out For Hegseth: New Allegations Of OPSEC Failures, Pentagon Mismanagement
The price for resisting Israel’s long-pursued US war with Iran?
And gold … goes up.
Israel is our misfortune.
Imagine being in the C suite of any of these manufacturers?
First you get your R&D budget annihilated by an artificially created “EV market” and now you have to make the call on how to either absorb those costs by paying lobbyists to push the EV mandates harder or relent to building vehicles consumers desire.
Toss in a few trillion to your capital expenditure budget to relocate your manufacturing and entire supply chain.
Now add to that the totally different managing philosophies of a conservative like Toyoda or a leftist stooge like Barra and you have no cohesion even within the industry.
Welcome to the total lunacy of central planning.
You didn’t pay for the ticket, but you’re going to be taken for a ride anyway.
The problem as I see it the cost of vehicles will go up, if they go up by 25% but lasted 50% longer the numbers for the household budget might pencil out. The only way the numbers would work out is going back to building the cars we made 20 years ago.
Twenty years ago most cars had ABS, AC, PW, PB, automatic transmissions and lasted well past the time it took to pay off their note. Now due to GovCo the odds of your EV lasting much past it’s note is a debatable point. Has the death/ injury rate plummeted with all the extra sensors, airbags, nannying control features and other devices that were mandated?
Maybe if we went back to building cars like we used to people might could afford to buy new cars again.
MACGA: Make American Cars Great Again. I couldn’t resist that one…….
‘the cost of vehicles will go up’ — Landru
Yeah. Vehicle prices are going up *almost* as fast as gold, which ripped higher by a stunning $104 an ounce overnight. Rocket chart:
https://tinyurl.com/2zth48bm
The car’s wore out, the kids need shoes
Got a bill from the doctor today
The landlord said you’ll get out tomorrow
If you don’t get me some pay
We’ll get ahead someday
We’ll get ahead someday
If the sun comes up and we both cut down
We’ll get ahead someday
— Dolly Parton & Porter Wagoner, We’ll Get Ahead Some Day
Gold is the anti-Trump.
Hi Jim:
While silver and gold have both gone up; I’m still hoping for a big rise in silver prices. Something tells me the best I can hope for is a relatively portable store of value for silver as the dollar loses value.
Even conservative Toyota figured out that their growth was limited if they kept doing things the same way. Those 1980s and 1990s Toyotas were simple and bulletproof. They weren’t the cheapest cars but they also weren’t unaffordable, the definition of high value, you got a lot of utility and longevity for your money. When you paid the premium for a Toyota you did so because you knew it would last for as long as you wanted to keep fixing it. Rust took out earlier Toyotas, though. Took them a while to dial in their steel and paint. Then in the 2000s they took a hit, frames rotting out, big recall where they had to do new frames (a $11,000 hit) under a bunch of 2005-2011 trucks in the cold weather states. I got a new frame on mine. Beyond that, the truck doesn’t feel quite as well made as those older ones. It’s better than similar era Chevy and Ford for sure, but only slightly. When I look at the current market I’m not sure a Tacoma is really any better than a Ranger or the Tundra better than an F150. Definitely not simple anymore. It’s somewhat regulations but I think also at some point, at least with Toyota North America, they realized that they hit market saturation, picking off all the Big 3 buyers they were going to and were competing with Honda and Nissan for their market, which may have caused some business etiquette concerns in Tokyo. So they had to increase the replacement rate beyond the few that wore out or were wrecked. I don’t think it was overt but subtle, like clipping coins.
Before they “revised” the Tacoma last year, it was a great truck. Now, the only engine you can get is a 4 cyl, they’ve done away with the halfway decent V6. My guess is, sales have declined as a direct result.
Yup, the 1GR V6 is a fantastic engine. Both engines in the 2nd gen Tacoma are excellent, the other being the 2TR 4 cylinder. The weakness with the 4.0L V6 is the transmission, at least the manual. It’s an RA60, the gears ratios are weird, not truck-like (it’s actually the same transmission as the Camaro of the era) and had an alloy snout for the release bearing, which has a steel inner race and wears it out. But the 2TR still had a R155 5-speed behind it, which is a better transmission, so the combination is more traditional. They kind of messed up with the 2016 redesign, which used a 3.5L V6 2GR that was also found in cars and minivans. It uses a modified Atkinson cycle, more ticky, higher RPM, more maintenance. Then the 4th gen in 2024, that’s a turbo I4, no V6. Agree with you on that fully.
What years are the 1st and 2nd gens? i may try and find a manual trans version.
Hilux (known just as Pickup or Truck in U.S. after about 1981):
1968-1972 is 1st gen
1973-1978 is 2nd gen
1979-1983 is 3rd gen (also 1st gen of 4WD version)
1984-1988 is 4th gen
1989-1997 is 5th gen (only 1989-1995 in U.S.)
1998-2004 is 6th gen (never in U.S.)
2005-2015 is 7th gen (never in U.S.)
2016- is 8th gen (not in U.S.)
Tacoma (North American only truck):
1995-2004 is 1st gen
2005-2015 is 2nd gen
2016-2023 is 3rd gen
2024- is 4th generation
There’s probably no one perfect version. I think the 05-15 Tacoma was the best overall but the RA60 6MT is a weak point and it grew in size. The 1st gen Tacoma was smaller, basically the same size as the 89-97 Hilux/Pickup but with an improved V6 (the 3.4L 5VZ) that corrected some head gasket design failures in the 3.0L 3VZ V6 in 89-95 trucks. Overall the Hilux/Pickup was/is more truck-like but the Tacoma got improving engines in each generation.
You might also note that from 1968 to 1995 all Pickups were standard shift with automatics becoming optional at some point, maybe in the early 1980s. The 1st gen Tacoma was that way, too. You’d usually get a stick shift unless you paid for upgrade. The 2nd gen trucks were sort of transitional. Technically it was a standard shift but most trucks came with automatics, at least in the middle and upper trims. I’ve seen mentioned that about 1% of V6 trucks are stick shift across all trim levels (SR5, TRD, etc.) while the 4 cylinder trucks it’s more common. The 3rd generation trucks are all automatic except for options on the very top TRD Offroad and TRD Pro trucks and even in those it’s only certain configurations. I’m not sure you can even get a stick in the current Tacoma at all.
My 3rd gen (’21) TRD Off Road is a 6MT. It was also an option on the TRD Sport and (for those whom money is no object) the TRD Pro.
No more SR5 or lesser trims could be had with the 6MT. The take rate is likely miniscule.
Thankfully, the 6MT is still an option on the 4th gen Taco, but for how much longer?
It’s still not available on the lower trims, and with the TRD Pro being a hybrid, that is now auto-only.