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So here’s my summary
Known facts as of today: 25% tariff on Canada and Mexico executed today. 10% in addition to prior 25% on China executed. Tariff on EU, trump clearly stated will happen in near future
Unknown: tariff on EU, how much and when.
Veblen Good. Please look up this terminology to describe a specific economic condition. It will be helpful.
BMW makes M cars to satisfy those car enthusiasts and those just want the most expensive car models, just because. But know that % of revenue is no where near to be considered their primary source of revenue. The real bread and butter comes from large volume of economical models that can be afforded by vast majority consumers. Just look up what are their highest sales model cars. So I personally think if the tariff becomes reality car manufacturers will focus on subsidizing their economical models over high end ones to sustain their profitability. Don’t expect the M models price ro remain or come down. Instead they will rise. The limited production in normal circumstances is already in short compared to demand. BMW will rather see this as an advantage to increase price to offset the reduction in profit margin on economic models in order to stay competitive. Again Veblen Good.
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