On April 2, President Trump titled the day Liberation Day and sought to change global trade patterns for the past 80 years. President Trump has the ability to install tariffs and in the short term prices will go higher. In the longer run, maybe manufacturing will come back, but not all of it.

One of the reasons not all of it in terms of auto and truck manufacturing is the internal combustion engine has many parts and some of them are sourced out to parts companies who can produce millions of parts at a quality needed and more importantly a price that is as low as possible. On the other side of the coin is electric vehicles and they have less parts. Perhaps President Trump will be a boon to EVs because they will have the fewest tariffs.

In an article by Matthew McClearn of the Globe and Mail, he used the National Highway Traffic Safety Administration (NHTSA) data from 360 vehicles on sale from the 2025 model year. Every single vehicle contains some proportion of its components originating from outside North America, varying from 1/5 to the entire vehicle.

The NHTSA publishes the data because in 1992, the American Automobile Labeling Act was passed and requires car makers to affix a label to every vehicle they sell in the US. They must calculate these percentages prior to the start of each model year and the NHTSA publishes them annually.

The highest vehicle content is the Kia EV6 with 80% content made in the US and 15% made in South Korea. The biggest selling truck is the Ford F150 and has a 45% US content.

It is important to note the world market for vehicles is 95 million, with the US market is about 16 million.

In 2018, a report said North American vehicle production internationally competitive. The reason is the low and high wage jobs are distributed to optimal regional location based on cost, capability and proximity to critical assets. President Trump’s tariffs will strength the domestic industry at a cost of international sales.

Linking to dividend paying stocks, all industries evolve for various reasons. Before the interstates highways were built, most people travelled by train. Then there was move to cars and planes, everything evolves for multiple reasons. Changing the systems means someone has to invest in bringing the change about, will tariffs be enough of a carrot to change the system?

There are more questions than answers, till the next time – to raising questions.