WEBVTT - Auto Tariffs with Erin Keating, Test Riding the Cadillac Celestiq 0:00:02.720 --> 0:00:10.399 Bloomberg Audio Studios, Podcasts, radio news. I'm Matt Miller and 0:00:10.400 --> 0:00:12.680 I'm Hannah Elliott, and this is hot Pursuit. 0:00:20.480 --> 0:00:26.040 All right, we are tariff tariff tariff today, right on repeat. 0:00:26.360 --> 0:00:29.840 Yeah, I mean sorry, sorry, not sorry, we're talking about tariffs. 0:00:30.080 --> 0:00:32.880 Well you have to talk about because it's going to 0:00:33.000 --> 0:00:37.440 change everything. I mean, it's completely reorganizing a century old 0:00:37.479 --> 0:00:41.440 system of global trade. So and cars are such a 0:00:41.440 --> 0:00:42.040 big part of that. 0:00:42.960 --> 0:00:46.280 This is this is like the entry of a bullet, 0:00:46.280 --> 0:00:50.560 where the entry point is smaller and then the destruction 0:00:51.080 --> 0:00:55.080 or the chaos is as the bullet moves through. And 0:00:55.160 --> 0:00:58.760 I'm not a ballistic expert, but you know, I think 0:00:58.800 --> 0:01:02.920 the ramifications of that are going to be massive. Obviously 0:01:03.440 --> 0:01:06.600 you're smiling, you're are you laughing at my No? 0:01:07.000 --> 0:01:08.679 No, I love it. First of all, I do love 0:01:09.080 --> 0:01:11.880 your comparison. I love fallistics. 0:01:12.400 --> 0:01:14.560 But yeah, I think you know the fallout is going 0:01:14.640 --> 0:01:16.600 to be increasingly massive. 0:01:16.680 --> 0:01:19.880 Well, and we've already seen like crazy fallout. My day 0:01:19.959 --> 0:01:23.760 job is covering the markets over the opening bell every 0:01:23.800 --> 0:01:26.080 day from nine to eleven on Bloomberg Television or bloomber 0:01:26.160 --> 0:01:31.360 dot com. And you know we focus in on single 0:01:31.400 --> 0:01:35.640 stock stories and on on industries, and I'm always kind 0:01:35.640 --> 0:01:38.679 of fighting with people who want to cover banks, and 0:01:38.680 --> 0:01:40.800 people want to cover retail, and people who want to 0:01:40.800 --> 0:01:43.600 cover energy, and people want to cover industrials, you know, 0:01:43.640 --> 0:01:46.840 but I care about cars. And the fun thing for 0:01:46.880 --> 0:01:50.480 me about this tear off chaos, beyond the fact that 0:01:50.600 --> 0:01:54.520 you know, chaos makes things more interesting, is everybody wants 0:01:54.560 --> 0:01:58.160 to talk about automakers. Like all of my producers like, yes, 0:01:58.320 --> 0:02:00.240 now's the time to focus on cars because there's such 0:02:00.240 --> 0:02:02.760 a huge part of this story. 0:02:02.840 --> 0:02:06.960 Yeah, I know, it's it's this. I've actually always known. 0:02:07.040 --> 0:02:10.640 I will cop to that because cars influence everything, and 0:02:10.760 --> 0:02:12.880 you know, most people don't think about cars on a 0:02:12.919 --> 0:02:16.280 day to day daily basis, but they are so woven 0:02:16.320 --> 0:02:20.520 into the fat fabric of our culture. You know, once 0:02:20.560 --> 0:02:23.079 you start messing with the car world, it's going to 0:02:23.160 --> 0:02:28.240 have very wide effects. So I, in a weird way, 0:02:28.360 --> 0:02:30.440 love to hear that all of your people on your 0:02:30.560 --> 0:02:31.799 side want to talk. 0:02:31.680 --> 0:02:33.639 Cars well, and we have the perfect guest to talk 0:02:33.680 --> 0:02:37.359 about it today, Eric Aaron Keating from Cox Automotive, which 0:02:37.360 --> 0:02:42.079 has done in such an incredible job researching and putting 0:02:42.080 --> 0:02:45.600 out intel on the business side of the industry. Plus 0:02:45.880 --> 0:02:49.560 she's a car lover herself. She goes and test drives 0:02:49.919 --> 0:02:51.720 new cars and has opinions on them, just like you 0:02:51.760 --> 0:02:57.120 and I do. And they own Mannheim, which does the auctions, 0:02:57.280 --> 0:02:59.040 the wholesale auctions for dealerships. 0:03:00.480 --> 0:03:02.360 Yeah, she's one of my favorite people to talk to. 0:03:02.639 --> 0:03:06.040 And she's just it's funny. She had a planned scheduled 0:03:06.120 --> 0:03:08.760 vacation this week, so talk about timing for her. She's 0:03:08.840 --> 0:03:12.120 just I don't think she got much vacation, but I'm 0:03:12.160 --> 0:03:13.799 so glad she could join us. 0:03:13.840 --> 0:03:15.640 All right, let's get straight into it. This is Aaron 0:03:15.720 --> 0:03:18.799 Keating from Cox Automotive. I just have a couple of 0:03:18.840 --> 0:03:23.000 personally specific questions. I've seen Cox doing great coverage on 0:03:23.720 --> 0:03:29.200 a number of different issues. One of them is affordable cars, 0:03:29.919 --> 0:03:33.520 Like it seems as if these tariffs, especially if there 0:03:33.560 --> 0:03:36.720 were so called reciprocal tariffs, go back into place in 0:03:36.840 --> 0:03:41.000 ninety days, there won't be any affordable cars for Americans 0:03:41.000 --> 0:03:42.520 to buy in this market. 0:03:42.960 --> 0:03:46.880 So you know what I want to just emphasize here, 0:03:46.880 --> 0:03:48.280 and this is and we were just talking about this 0:03:48.320 --> 0:03:50.840 as a team this morning. The costs that we're seeing 0:03:50.840 --> 0:03:53.280 at are coming in are costs and cost only So 0:03:53.320 --> 0:03:56.040 when we're looking at a tariff, we're saying the automaker 0:03:56.120 --> 0:03:58.400 or the importer of record, which is typically the automaker, 0:03:58.480 --> 0:04:00.560 is going to get hit with this twenty five twenty 0:04:00.600 --> 0:04:03.680 seven and a half percent tiara. How that shows up 0:04:03.720 --> 0:04:08.640 for the customer completely different story. And honestly, I'm not 0:04:08.760 --> 0:04:12.720 sure how quickly automakers are going to jump in to 0:04:12.880 --> 0:04:16.080 jack up the prices on individual models. In fact, I 0:04:16.080 --> 0:04:18.240 would bet almost all of them will look across their 0:04:18.360 --> 0:04:21.719 entire portfolio, and you know, the vehicles that you guys 0:04:21.720 --> 0:04:23.479 are a lot of the times focused on luxury are 0:04:23.520 --> 0:04:26.359 going to get the bump because profitability is there to 0:04:26.360 --> 0:04:28.600 be able to absorb some of that TARA so that 0:04:28.600 --> 0:04:32.400 they can keep competitive at the entry level models and 0:04:32.720 --> 0:04:36.960 or just the vehicles that are available for lower price. 0:04:37.040 --> 0:04:39.560 So just because a thirty thousand dollars vehicle is going 0:04:39.640 --> 0:04:41.720 to get hit with twenty five percent, say like a 0:04:41.800 --> 0:04:44.840 Chevy Tracks, which we know is completely brought in from Korea, 0:04:44.920 --> 0:04:48.040 I can't imagine, at least in my head, how Chevy says, oh, 0:04:48.160 --> 0:04:50.520 let's let's make that thirty thousand dollars car bear the 0:04:50.600 --> 0:04:52.800 hit of that twenty seven and a half percent, right 0:04:53.320 --> 0:04:55.320 or twenty five percent. I think they don't have the 0:04:55.360 --> 0:04:58.719 original MFM, But so I think that that's that's what 0:04:58.760 --> 0:05:00.640 everyone kind of has to keep in mind, is that 0:05:00.720 --> 0:05:03.000 the automaker has a lot of different levers to pull 0:05:03.440 --> 0:05:07.400 to figure out how does this ultimately impact the consumer? 0:05:08.040 --> 0:05:11.680 Prices will rise naturally demand and supply, and the and 0:05:11.720 --> 0:05:13.640 the pull a head buying that we have right now, 0:05:13.680 --> 0:05:17.280 and the fact that inventory might get impacted because OEMs 0:05:17.360 --> 0:05:20.320 might pull back on producing as much until they can 0:05:20.360 --> 0:05:23.560 figure out how they're going to deal with the economic 0:05:23.640 --> 0:05:27.480 challenge of this. But it's not apples to Apple's tariff 0:05:27.680 --> 0:05:28.800 price increase. 0:05:28.640 --> 0:05:32.000 All right, interesting, and that would that that would be 0:05:32.080 --> 0:05:35.240 dependent on the automaker too. Like sare to say, some 0:05:35.400 --> 0:05:38.360 automakers believe that their customers will be tolerant to a 0:05:38.440 --> 0:05:41.440 slightly and some may think, no, we're not, We're not 0:05:41.440 --> 0:05:42.000 going to do that. 0:05:42.120 --> 0:05:45.800 I think it's going to vary across automakers. I think 0:05:45.839 --> 0:05:49.440 it's going to vary across segments models, you know, I 0:05:49.440 --> 0:05:52.840 think maybe even down to regional areas, because again, you're 0:05:52.839 --> 0:05:54.680 going to get impacted by what the dealer is seeing 0:05:54.720 --> 0:05:58.480 on the in the market level conditions. Because MSRP is 0:05:58.480 --> 0:06:01.479 is one way the price changes right. Another way the 0:06:01.480 --> 0:06:05.040 price changes is list price what gets put out to 0:06:04.360 --> 0:06:06.200 the consumer. 0:06:06.560 --> 0:06:09.799 How much is that also related to the breakdown within 0:06:10.040 --> 0:06:14.400 each specific vehicle of which percentage of components are sourced 0:06:14.560 --> 0:06:19.360 or made in the US anywhere else? And I asked 0:06:19.520 --> 0:06:22.960 I of LA like yesterday and that's obviously an American brand, 0:06:23.240 --> 0:06:25.320 And they're not really able to answer right now. 0:06:26.880 --> 0:06:30.520 They don't put that on the Monroney because yeah, and 0:06:30.560 --> 0:06:31.480 the Maroney. 0:06:31.160 --> 0:06:34.320 What it shows you, Yeah, so the Monroney typically will 0:06:34.360 --> 0:06:38.680 show you assembly. Remember for Monroney purposes. According to Nitza, 0:06:39.000 --> 0:06:41.240 US and Canada are combined, even though we know the 0:06:41.279 --> 0:06:44.000 terror situation is Canada MASA right, well not all of 0:06:44.040 --> 0:06:45.160 North America, right, because. 0:06:44.960 --> 0:06:45.560 Mexico is not. 0:06:45.920 --> 0:06:47.839 So it's when it says it's US, it's you'll see 0:06:47.960 --> 0:06:50.839 US slash Canada. So it throws those two into the 0:06:50.839 --> 0:06:53.200 bubble together, even though we know tariffs is actually being 0:06:53.200 --> 0:06:56.720 addressed as Canada Mexico US. So that's a little bit 0:06:56.800 --> 0:06:59.000 interesting and difficult for people to parse through the data. 0:06:59.560 --> 0:07:03.279 Second of all, it will matter based on okay, So 0:07:03.279 --> 0:07:05.400 there's three ways basically at least that we can see 0:07:05.400 --> 0:07:08.000 that the tariffs are going to get put onto the vehicles. One, 0:07:08.839 --> 0:07:11.800 you completely import the assembled vehicle, you pay the full 0:07:11.880 --> 0:07:14.720 bear of the tariff from any other country outside. 0:07:14.320 --> 0:07:15.280 Of North America. 0:07:15.400 --> 0:07:18.240 If you import Canada and Mexico, you get hit with 0:07:18.280 --> 0:07:20.200 the twenty five percent, but they'll give you credit for 0:07:20.440 --> 0:07:22.840 US content, And we don't yet know how they're going 0:07:22.920 --> 0:07:26.600 to certify which pieces really consist of US content. And 0:07:26.640 --> 0:07:28.920 then the third way that they're going to teariff you 0:07:29.000 --> 0:07:33.400 is if you're US assembled, but any componentry parts, steel, 0:07:33.400 --> 0:07:35.600 an aluminum, anything else that's coming into the country that's 0:07:35.600 --> 0:07:38.080 helping you build that vehicle that will have been tariffed 0:07:38.080 --> 0:07:39.400 on its way into assembly. 0:07:39.480 --> 0:07:41.880 Does that make sense, yes, But it's worse than that. 0:07:42.080 --> 0:07:46.080 According to Bloomberg. For example, an Audi Q five assembled 0:07:46.120 --> 0:07:49.440 in Mexico gets hit with a twenty five percent tariff 0:07:50.080 --> 0:07:53.360 for being a car coming in from outside the US 0:07:53.520 --> 0:07:58.160 YEP also a twenty five percent tariff for being a 0:07:58.280 --> 0:08:05.440 non USMCA compliant Mexican product coming from Mexico, and a 0:08:05.480 --> 0:08:08.440 two and a half percent surcharge for not being US 0:08:08.600 --> 0:08:12.360 MCA compliant. If that makes sense, So total tariffs for 0:08:12.440 --> 0:08:15.320 the AUDIQ five coming in from wherever San Luis Bispo 0:08:15.480 --> 0:08:17.280 is going to be fifty two and a half percent. 0:08:17.720 --> 0:08:20.440 Yes, so you're correct the auto tariffs and I haven't 0:08:20.480 --> 0:08:22.720 looked specifically into that car, but you're correct in the stacking. 0:08:23.320 --> 0:08:27.640 So when March twenty six came up, Trump indicated, Hey, 0:08:27.800 --> 0:08:30.320 these auto tariffs are going to be stacked on top 0:08:30.360 --> 0:08:33.120 of existing tariffs that I've already been put into place, 0:08:33.320 --> 0:08:37.079 which included the February first IEPA authorization of twenty five 0:08:37.120 --> 0:08:39.640 percent on Canada, Mexico and the ten percent on China, 0:08:39.720 --> 0:08:42.280 which the ten percent went to twenty percent, and at 0:08:42.280 --> 0:08:45.800 the time they gave the USMCA compliant exemption. So if 0:08:45.800 --> 0:08:49.440 a car is not USMCA compliant, you're correct they were 0:08:49.480 --> 0:08:53.079 subjected to that twenty five percent under the IEBA order 0:08:53.120 --> 0:08:55.840 February first, and that would get stacked on top of 0:08:55.880 --> 0:08:57.800 the twenty five percent that was then issued on March 0:08:57.840 --> 0:08:58.360 twenty six. 0:08:58.559 --> 0:08:59.240 You're correct on that. 0:08:59.400 --> 0:09:01.439 And by the way, is our understanding and do they 0:09:01.480 --> 0:09:04.720 have to? So I'm driving a BMWM two right now, 0:09:05.400 --> 0:09:08.720 test driving it, and it's amazing not currently no, but 0:09:08.800 --> 0:09:11.280 you have that yes, I'm not actually yeah, but so 0:09:11.400 --> 0:09:14.839 I have it and twind in his hair and yeah, 0:09:14.880 --> 0:09:16.600 my hair is flying in the wind. 0:09:16.800 --> 0:09:16.839 No. 0:09:17.000 --> 0:09:23.640 So on the Monroney it says parts content information and 0:09:23.679 --> 0:09:28.720 then it lists major source of foreign parts Germany twenty 0:09:28.720 --> 0:09:33.040 seven percent, Mexico fifteen percent assembled in Mexico, and then 0:09:33.240 --> 0:09:35.560 US Canada parts content six percent. 0:09:36.600 --> 0:09:39.679 Yes, you're right, and the Monroney label. So yes, I 0:09:40.240 --> 0:09:42.160 started to say there and then I and I jump 0:09:42.200 --> 0:09:45.240 to another fact. The Monroney label does. Yes, it will 0:09:45.280 --> 0:09:48.240 typically tell you where the engineer transmission is from, what 0:09:48.320 --> 0:09:52.160 the other percentage of content is, and then what's available 0:09:52.200 --> 0:09:54.680 in the US, and then where it was assembled. I 0:09:54.720 --> 0:09:58.040 have seen varying, so admittedly I haven't done too deep 0:09:58.080 --> 0:10:00.880 into what is the like what does every manufacturer have 0:10:00.920 --> 0:10:04.479 to put on them, but most of them do have those. 0:10:04.240 --> 0:10:08.000 Four or five different outlines exactly just helpful for consumers. 0:10:08.160 --> 0:10:11.319 This engine was put together in Austria, the transmission was 0:10:11.320 --> 0:10:15.199 built in Germany. The whole thing prices out at eighty 0:10:15.240 --> 0:10:19.080 two five, which is already kind of steep for an 0:10:19.280 --> 0:10:21.640 M two. If you think about it, like when you 0:10:21.679 --> 0:10:24.080 were a kid that was that would have been an 0:10:24.200 --> 0:10:27.839 M three and it would have been like forty five 0:10:28.440 --> 0:10:31.760 like Max so sure. And now if if they're not 0:10:32.040 --> 0:10:35.880 USMCA compliant, this M two is going to sell in 0:10:35.920 --> 0:10:40.120 the US, assuming BMW doesn't eat the costs for one 0:10:40.200 --> 0:10:45.760 hundred and like at least one hundred and thirty thousand dollars, 0:10:46.240 --> 0:10:47.120 that's nuts. 0:10:46.840 --> 0:10:48.800 In theory, Well it would cost it would cost them 0:10:48.840 --> 0:10:49.760 manufacturer that much. 0:10:49.880 --> 0:10:52.080 Yes, so correct whether. 0:10:51.880 --> 0:10:54.920 They end up you know, fully giving that to the client. 0:10:54.920 --> 0:10:57.959 And we know BMW has already said, hey, we're gonna 0:10:58.280 --> 0:10:59.839 we're gonna eat the cost for now, I think through 0:10:59.880 --> 0:11:03.680 the end of May, is it? And that, you know, 0:11:03.840 --> 0:11:07.080 likely is an exercise of the automaker to say, what 0:11:07.120 --> 0:11:07.520 does this. 0:11:07.520 --> 0:11:09.840 Look like moving forward? Where do we put the costs? 0:11:10.120 --> 0:11:12.400 How do we afford this so that we don't make 0:11:12.440 --> 0:11:14.119 the end to completely irrelevant? 0:11:14.920 --> 0:11:16.120 Or do we get rid of the end too? 0:11:16.120 --> 0:11:18.240 Because you know what, no matter which way we slice this, 0:11:18.280 --> 0:11:19.760 we're not going to be able to make this at 0:11:19.760 --> 0:11:22.719 an affordable price, and therefore we're gonna. 0:11:22.720 --> 0:11:25.160 Get rid of the model. I mean that's certainly possible 0:11:25.160 --> 0:11:25.520 as well. 0:11:25.720 --> 0:11:28.400 I know, Matt, have you had anyone call and ask 0:11:28.440 --> 0:11:31.679 to buyer in too? Because I'm thinking the idea that 0:11:31.760 --> 0:11:34.960 dealerships are calling people yeah, can we buy. 0:11:35.080 --> 0:11:37.120 Well, this is something else that I wanted to ask about. 0:11:37.320 --> 0:11:40.040 Cox has been doing awesome coverage of the Mannheim Well, 0:11:40.080 --> 0:11:43.559 I think you own the Manheim auctions man, Yes, we do. Yeah, 0:11:43.679 --> 0:11:49.320 but I have heard that we're already seeing like nutsoe 0:11:49.320 --> 0:11:52.200 prices at these auctions. Have you heard any you know, 0:11:52.280 --> 0:11:57.120 anecdotal evidence that dealers are paying sure high prices. 0:11:57.240 --> 0:11:57.520 Sure? 0:11:57.800 --> 0:12:02.560 Yeah, No, we've been seeing increased sales conversion. Jeremy rob 0:12:02.600 --> 0:12:05.560 one of my colleagues, did his monthly movie call on 0:12:05.679 --> 0:12:09.559 Monday with some great you know figures around what we're 0:12:09.600 --> 0:12:11.840 seeing in the used car market. But absolutely, we're starting 0:12:11.840 --> 0:12:14.600 to see the sales conversion rate go up, We're. 0:12:14.440 --> 0:12:15.880 Starting to see the. 0:12:15.720 --> 0:12:18.960 Wholesale costs go up, and we're starting to see listing 0:12:19.000 --> 0:12:20.880 prices go up. 0:12:20.960 --> 0:12:22.160 So one hundred percent. 0:12:22.200 --> 0:12:23.760 You can tell the dealers are saying, you know, we 0:12:23.800 --> 0:12:25.280 got to stack up and make sure that we have 0:12:25.360 --> 0:12:27.080 good supply of new and used. 0:12:27.559 --> 0:12:30.360 So I wonderful'll be back in the situation. When I 0:12:30.640 --> 0:12:34.720 bought my Silverado in twenty twenty two, I went to 0:12:34.760 --> 0:12:37.599 the Chevy dealer to collect the truck when it was 0:12:37.640 --> 0:12:40.800 finally delivered from Mexico, where it was assembled, and they 0:12:40.840 --> 0:12:44.960 had an identical truck on the lot that was used 0:12:44.960 --> 0:12:47.720 with like ten thousand miles for ten thousand dollars more 0:12:47.800 --> 0:12:49.920 than I was paying MSRP. Are we going to start 0:12:49.920 --> 0:12:50.640 seeing that again? 0:12:51.880 --> 0:12:53.360 We might. I mean, I think we're going to see 0:12:53.440 --> 0:12:54.480 a lot of the same. 0:12:54.320 --> 0:12:59.000 Things that we thought about as part for. 0:12:58.960 --> 0:13:00.240 The course during Cold cod. 0:13:00.600 --> 0:13:02.319 The difference is going to be that we're probably going 0:13:02.320 --> 0:13:04.800 to be in a period of high. 0:13:04.520 --> 0:13:05.640 Frenzy, high profit. 0:13:06.360 --> 0:13:07.360 But at the end of the day, we have a 0:13:07.440 --> 0:13:10.959 very different economic situation now for the country as a 0:13:10.960 --> 0:13:14.440 whole than we did in the pandemic, which I think 0:13:14.520 --> 0:13:16.719 is going to slowly but surely towards the end of 0:13:16.760 --> 0:13:20.520 the year tamper demand. We don't have the federal stimulus 0:13:20.520 --> 0:13:24.520 coming into the economy. We know that consumers are not 0:13:24.600 --> 0:13:26.600 as financially stable as they were that and we know 0:13:26.720 --> 0:13:29.200 that that used to be when you know, interest rates 0:13:29.200 --> 0:13:31.720 were at crazy lows and now they're at crazy highs, 0:13:32.080 --> 0:13:34.320 so on and so forth. You know, people aren't moving 0:13:34.320 --> 0:13:36.920 as much, which usually when someone moves it it spurs 0:13:36.920 --> 0:13:39.360 on a purchase of a vehicle. So there's so many 0:13:39.360 --> 0:13:41.280 other things that are happening in the market that lead 0:13:41.360 --> 0:13:43.439 us to believe that while demand might froth quite a 0:13:43.440 --> 0:13:45.680 bit right now, it will likely taper off as we 0:13:45.720 --> 0:13:47.920 get further into the year because of all the other 0:13:48.000 --> 0:13:49.360 extenuating circumstances. 0:13:49.880 --> 0:13:52.960 Are you following it all? This sort of ongoing confusion 0:13:53.559 --> 0:13:57.760 when it comes to vintage vehicles and cars that are 0:13:57.760 --> 0:14:01.440 older than twenty five years, you know, it seemed like 0:14:01.440 --> 0:14:03.280 they were going to get hit and then now there's 0:14:03.320 --> 0:14:05.320 a carve out, but they're still going to get hit 0:14:05.360 --> 0:14:08.440 by the parts tariffs. Do you have any clarity on 0:14:08.480 --> 0:14:09.160 that to share? 0:14:09.880 --> 0:14:11.600 There's a great question. And I listened to you guys 0:14:11.600 --> 0:14:13.920 talking about this the other day, so I love it. Yeah, 0:14:14.040 --> 0:14:17.920 And I had just read yes, yes. So as much 0:14:17.960 --> 0:14:20.840 as I have tried to steep my interest here in 0:14:21.920 --> 0:14:24.600 tariff and myledge grow my knowledge, I have yet to 0:14:24.880 --> 0:14:28.120 officially become a trade lawyer, but I play one on 0:14:28.160 --> 0:14:31.520 TV and I can tell you that it is confusing. 0:14:33.280 --> 0:14:34.840 Low and behold, we're going to have a whole new 0:14:34.840 --> 0:14:37.320 well not news services industry. But let me tell you, 0:14:37.440 --> 0:14:42.400 customs brokers, it's your day. Get out there, go for it, man. 0:14:43.240 --> 0:14:45.400 But I do think there is some confusion because there 0:14:45.400 --> 0:14:46.960 did seem to be an exemption. 0:14:46.640 --> 0:14:48.720 For vehicles that were over twenty five years. 0:14:49.000 --> 0:14:52.600 But then depending on what comes, what specificity there is 0:14:52.640 --> 0:14:56.520 in the annex one, and what actually hits the federal register, 0:14:56.760 --> 0:14:58.480 these are all things we never knew we would know 0:14:58.520 --> 0:15:01.400 anything about. That will tell us a little bit more 0:15:01.400 --> 0:15:03.880 information about which parts and specific will get hit with 0:15:03.960 --> 0:15:06.480 tariffs at what level. So would they get hit by 0:15:06.520 --> 0:15:08.920 the automotive terrafs this is March or twenty sixth if 0:15:08.920 --> 0:15:11.080 they don't appear in that schedule, didn't they get hit 0:15:11.120 --> 0:15:13.600 by the ten percent tariff that was put on all 0:15:14.320 --> 0:15:18.240 countries and eventually bet the reciprocal tariff. It's anyone's guess 0:15:18.240 --> 0:15:20.560 at this point. So this is why you see a 0:15:20.560 --> 0:15:23.640 lot of analysis, you know, paralysis analysis. 0:15:23.680 --> 0:15:27.600 It seems impossible because because Hannah, if you if you 0:15:27.720 --> 0:15:31.200 already don't know the origin of the components of a 0:15:31.360 --> 0:15:35.400 new Cadillac, try figuring out the origin of the components 0:15:35.440 --> 0:15:40.160 of a nineteen ninety seven six thirty five CSI like, right, Well, that's. 0:15:40.120 --> 0:15:46.240 My question is is this deliberately confusing and chaotic or 0:15:46.400 --> 0:15:48.760 is it a question of no one actually knows what 0:15:48.800 --> 0:15:54.280 they're doing? And I mean, is this completely deliberate or 0:15:54.400 --> 0:15:57.520 is this a case of the people in charge making 0:15:57.560 --> 0:16:00.280 the rules are sort of learning as they go and 0:16:00.320 --> 0:16:01.920 figuring out as they go along. 0:16:02.480 --> 0:16:05.120 You know, it's a great question and what I would 0:16:05.160 --> 0:16:06.800 actually say, and I think you guys would agree with this. 0:16:07.200 --> 0:16:10.680 It is the massive uncovering of why we love automotive, 0:16:11.440 --> 0:16:16.720 right but why you know, industry specific information is incredibly 0:16:16.760 --> 0:16:19.520 important when you're thinking about doing blanket moves that might 0:16:19.560 --> 0:16:25.800 impact multiple sectors, and the global automotive industry literally touches 0:16:25.920 --> 0:16:29.560 nearly every sector of the economy. It is incredibly and 0:16:29.680 --> 0:16:35.120 highly complex, and I don't believe it's as deliberate as 0:16:35.120 --> 0:16:37.120 some people might think it is, although there could be 0:16:37.120 --> 0:16:38.480 some deliberate components of it. 0:16:38.720 --> 0:16:39.640 I think it truly is. 0:16:39.720 --> 0:16:42.040 Even people in automotive who've been in it for thirty 0:16:42.040 --> 0:16:45.440 five years are going, huh, actually, where does that come from? 0:16:45.520 --> 0:16:47.960 Or how did that get into our supply chain? So 0:16:48.200 --> 0:16:52.400 I think by its very nature it's incredibly complex, which 0:16:52.400 --> 0:16:55.400 is why, you know, the more individuals that are out 0:16:55.440 --> 0:16:57.000 there that have been doing this for a long time 0:16:57.000 --> 0:16:59.880 and have that deep, deep knowledge of the supply chain 0:17:00.240 --> 0:17:02.000 are going to come in real handy. 0:17:01.760 --> 0:17:05.040 To trying to dig this apart and figure out Wait 0:17:05.119 --> 0:17:05.640 a minute. 0:17:05.400 --> 0:17:07.480 Because you hit you need a trade layer, you need 0:17:07.480 --> 0:17:10.160 a customs broker, you need a supply to it expert. 0:17:10.480 --> 0:17:12.159 You know, you're going to need several people at the 0:17:12.240 --> 0:17:16.080 table to mince through all of the details because you're 0:17:16.160 --> 0:17:18.600 likely to cross over a couple of different areas of 0:17:18.640 --> 0:17:22.280 expertise to make a final declaration of like, aha, yes, 0:17:22.440 --> 0:17:28.080 this part subject to sixteen point five percent effective terrorfreate right. 0:17:28.160 --> 0:17:30.040 You know, I think it's gonna it's going to take 0:17:30.040 --> 0:17:31.080 a lot of people to get there. 0:17:31.560 --> 0:17:32.720 Yeah, okay, good. 0:17:32.600 --> 0:17:34.720 I did I have I know you got to go, 0:17:34.920 --> 0:17:38.480 but I have one last question. You don't just do 0:17:38.560 --> 0:17:41.800 the business end of this. You also love cars. And 0:17:41.840 --> 0:17:43.280 I know last time we talked to you, you were 0:17:43.320 --> 0:17:46.400 on a press junket. So I was going to ask, 0:17:46.760 --> 0:17:52.800 what's your favorite car of the currently assembled in the 0:17:52.920 --> 0:17:55.920 US vehicles, Like, if you had to pick one that's 0:17:55.960 --> 0:17:59.720 not assembled outside of this border, what would you choose? 0:18:00.080 --> 0:18:02.639 And it's not like there's a broad variety to choose from, right, 0:18:02.680 --> 0:18:05.480 because they're mostly trucks. 0:18:05.720 --> 0:18:08.880 Yeah, yeah, exactly fifty percent the chicken tags. That's something 0:18:08.920 --> 0:18:11.000 we should all consider in looking at this right now. 0:18:11.560 --> 0:18:13.840 Oh my goodness, you asked a tough one. Because I've 0:18:13.880 --> 0:18:15.800 been so focused on what's imported. I don't know that 0:18:15.800 --> 0:18:17.920 I've been paying a ton of attention to exactly what's 0:18:17.960 --> 0:18:19.840 actually built in the US. 0:18:19.880 --> 0:18:22.520 Like, I mean, do you like the Rivan? Do you 0:18:22.680 --> 0:18:26.800 like the Lucid? So you were going to ev No, no, no, no, 0:18:26.920 --> 0:18:29.800 I wouldn't choose an EV. I would probably choose an 0:18:29.880 --> 0:18:33.159 F one fifty also, or yeah, or a Tahoe. I 0:18:33.240 --> 0:18:35.240 like the Tahoes and suburbans, you know, I. 0:18:35.200 --> 0:18:39.000 Mean Honda and Toyota both. Yeah, they both have a 0:18:39.040 --> 0:18:41.120 ton of vehicles. I mean eighty percent of Toyotas are 0:18:41.440 --> 0:18:42.800 assembled in the US. 0:18:42.840 --> 0:18:43.840 Same thing with Honda. 0:18:43.880 --> 0:18:46.480 There's Mustangs and Corvettes, right. 0:18:46.359 --> 0:18:49.600 There's Mustangs and corvettes. Yeah, I mean I could list 0:18:49.640 --> 0:18:51.680 you fifty cars that are not assembled in the US 0:18:51.760 --> 0:18:53.040 right now. You put me on the spot. 0:18:53.800 --> 0:18:56.240 Well, the Mustang is the only one of the only vs. 0:18:56.680 --> 0:18:58.320 The vights you can get with a stick can be 0:18:58.400 --> 0:19:03.720 listed on two fingers, right, Mustang GT and Cadillac CT 0:19:03.920 --> 0:19:07.280 five V black wing. Right, and that'd probably my choice. 0:19:07.720 --> 0:19:09.720 Yeah, I'll go with your choice. I'll let you check 0:19:09.920 --> 0:19:10.440 I'll let you. 0:19:10.359 --> 0:19:12.679 Pick it out for me about that, Thanks Aaron, I 0:19:12.680 --> 0:19:14.960 trust your judgment, really appreciate your time. 0:19:15.359 --> 0:19:17.959 Thank you, Aaron. We all know my answer to that. 0:19:18.359 --> 0:19:20.159 There's only one answer, and that's the Corvette. 0:19:20.520 --> 0:19:23.719 You know what, I might agree. I have this internal 0:19:23.920 --> 0:19:27.920 dilemma or this internal debate all the time if I 0:19:27.960 --> 0:19:33.000 were going to choose a sports car or like, would 0:19:33.040 --> 0:19:36.040 I choose a Cadillac CT five V black Wing or 0:19:36.080 --> 0:19:38.600 would I choose a Corvette? And there you could have 0:19:38.920 --> 0:19:42.440 also a ZO six or ZL one. 0:19:43.800 --> 0:19:48.959 I don't know, thanks American specifically American branded HIC. 0:19:49.160 --> 0:19:51.199 I mean, if I had another one hundred and thirty 0:19:51.440 --> 0:19:54.640 forty fifty grand to buy a sweet car, those two 0:19:54.720 --> 0:19:58.359 would be way up there my short list, way up there, 0:19:58.640 --> 0:20:00.320 And I don't know which one I would rather have. 0:20:00.440 --> 0:20:02.840 You know, they're different. For you can't get a stick 0:20:02.880 --> 0:20:05.280 with the Corvette. But do I care that much about 0:20:05.280 --> 0:20:06.600 three pedals? Maybe not? 0:20:07.720 --> 0:20:09.600 Oh, I mean, I guess because the. 0:20:09.480 --> 0:20:13.120