00:00Tariffs are a very blunt instrument.
00:02They are damaging in so many different types of ways.
00:06I think, first of all, they're damaging to the end customer,
00:09in this case, the US customer, because car industry typically
00:14makes 6% to 8% of profit.
00:16You add a 25% tariff on, obviously,
00:19that wipes out more than the profit.
00:21So inevitably, prices increase.
00:24So first point is it's inflationary.
00:27Prices go up.
00:28Secondly, obviously, pricing of cars is very elastic.
00:32So as price goes up, volume goes down.
00:36Volume down means that people lose their jobs
00:39in foreign factories, including the UK.
00:42So very bad for the car industry insofar
00:44as people are losing their jobs.
00:47The third thing I think is also important
00:49is a tariff is a barrier, and it's
00:51protecting a sick patient.
00:53And basically, what happens is if that sick patient is
00:56insulated for too long, they become fat and lazy
01:00and no longer competitive.
01:02And so my great worry for the US car industry
01:05is that it will be no longer competitive with the Chinese,
01:09particularly in AI and particularly in new energy.
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