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Brian Lehrer: Brian Lehrer on WNYC. You've probably been hearing the tariffs and trade deals headlines in recent days. Yesterday with the EU, last week with Japan, Indonesia, and the Philippines. In some cases, it seems like the US will be imposing tariffs on their exports to us like 15% now for most things coming from the EU, but they won't be taxing US exports to them.

An article in Kiplinger, the personal finance publication, had this headline the other day, "GM Not Planning To Raise Car Prices Despite Tariff Hit," their CFO says. Let's talk about that, and the bigger picture of the relationship between these tariff changes, and what Americans are paying, and will pay for things with Alexandra Svokos, Personal Finance Reporter for Kiplinger. Alexandra, thanks for coming on. Welcome to WNYC.

Alexandra Svokos: Of course. Thank you so much for having me.

Brian Lehrer: Listeners, as we've been inviting you to do all year regarding the tariffs, help us report this story. Is your business eating extra costs for now, like apparently GM is? Several other articles have been saying, that's been a trend in corporate America. Does this apply to you, or your company, or any other tariffs? Comments or questions? 212-433-WNYC, 212-433-9692, call or text.

Alexandra, you reported that GM's quarterly report released this month, showed more than $1 billion cost of tariffs to the company. Did they get specific, or can you about how they're feeling that?

Alexandra Svokos: Yes, absolutely. This is a trend we've seen, basically, across the automobile industry, that across the board, no matter where the company is based, basically, company is taking a major hit that is coming from a 25% tariff that the President imposed earlier this spring. For GM in particular, they reported their second quarter earnings last week. They announced that it was a $1.1 billion hit, that they say is from tariffs.

Again, this is a trend. Stellantis said they had. They've taken a $2.7 billion hit so far this year in the first half of 2025. Volkswagen had a $1.5 billion hit in the first half of '25. Basically, there's problems [chuckles] across the board for four carmakers, because of these auto tariffs that were imposed. For a company like GM, it can be a little confusing just because you might think, "Oh, this is an American company. Why are they having problems with tariffs?"

The thing to keep in mind is that, basically, there is no car made in any one country, and that's where the problems come in, is that manufacturing and parts are imported from around the world, essentially.

Brian Lehrer: Right, and it's not just cars. I personally know two people associated with different kinds of companies, and I'm not even going to say which, because these are people who know me, and people know that they know me, and I don't want to out their companies, because they don't want this on the radio, but two different kinds of companies that are not automakers, saying that they're American companies based in the United States, but they are dependent on certain imported parts to complete their products, and those parts are becoming more expensive because of the tariffs. Yet, those companies, too, from what these people tell me, are not passing the cost on to consumers yet. Why isn't General Motors?

Alexandra Svokos: Yes, so a lot of the reason why we're seeing that trend of a company like General Motors, or the ones you be referring to, trying to not pass the price on to customers is, in one sense, because nobody wants to be the first to do it. It's a bad look, it's bad publicity. They're trying to, essentially, hold out for as long as they can, especially as the tariffs are still being negotiated across the board.

Many, for example, automakers suggest that they're still trying to push the President, push the administration on changing the terms of certain deals. Even with the European deal, that was just a preliminary deal announced yesterday, we still don't know the exact specifics of a lot of different things on it. In many cases, it seems like these companies are not raising prices, because they're holding out hope that something will change on the tariffs, and they don't want to unnecessarily raise prices, and end up, essentially, scaring away customers before they have to.

Brian Lehrer: Right. Here's a Wall Street Journal article from last week. Headline, "Trump's Tariffs Are Being Picked Up By Corporate America." Subhead, "Neither consumers nor foreign countries are assuming much of the tariff burden, at least not yet." There's more evidence that this is a trend, but do you have reporting on what GM plans to do eventually, if these tariffs continue?

Alexandra Svokos: Yes. What I will say for carmakers, in general, is that while prices have not gone up yet, the word "yet" is the very important keyword there. That's something that at Kiplinger, our experts really expect that prices will eventually raise, approximately, between 4% and 8%, and that will eventually hit the consumers. We just don't know exactly when that would happen as these deals are still being finalized.

Brian Lehrer: On the auto tariffs in particular, your article mentioned that President Trump instituted 25% tariffs on all imported cars, and auto parts, with some particularities including that vehicles assembled in the US are eligible for partial tariff rebates, so that's an indication that it's complicated. It's not just one number, right? That 25% tariff on those things went into effect in late spring. Is that still the number? That's a high tariff.

Alexandra Svokos: It is definitely a high tariff. As you mentioned, there are some complications with this, especially, for American automakers like GM, in that, there is an expected rebate on cars that are produced in Mexico and Canada, but made by an American brand like GM, and there are some particularities like tariffs are reduced if a car was made in Mexico, but something like 60% of the car parts were American made. I'm being a little vague about this just because it is a little vague.

Brian Lehrer: It's complicated. Yes.

Alexandra Svokos: It's complicated to say the least.

Brian Lehrer: With Alexandra Svokos from Kiplinger. I never remember, is it Kiplinger, or Kiplinger?

Alexandra Svokos: Kiplinger, but everyone gets it wrong half the time. [chuckles]

Brian Lehrer: I got it wrong the first two times. As we talk about some of the impact and temporary, at least, eating of the costs of the impact of the tariffs by Corporate America. 212-433-WNYC. If you want to get in on this. Steve, a customs attorney, we're going to take your call in Manhattan in just a second. Anyone else? 212-433-9692, but did I interrupt you, Alexandra? I had to do my legal ID there, but were you in the middle of a thought?

Alexandra Svokos: Oh, all I was going to say was, just following what you were saying about the 25% tariff on car parts and automobiles. What's been complicating things even more in the last week are some of the trade deals that have been announced with other countries. Last week we got the news that Japan reached a trade deal with a 15% tariff, and yesterday, again, it's preliminary, we're still getting the details, but with Europe, again, it looks like that 15% number is coming into play for tariffs, which is considerably lower than the 25% tariff on all cars and car parts, so that's definitely a point of contention that's coming to the fore, and we'll have to see how that plays out.

Brian Lehrer: I want to get your take in a minute about this European EU-US trade deal, and maybe the one involving the Asian countries as well, or the ones, because the headlines seem to be reading that we're going to place tariffs on what they send here, but they're not going to place tariffs on what we send there, and why would they ever agree to that? Hold that for a second. Steve in Manhattan, you're on WNYC. You're a customs attorney, is that right?

Steve: That's right. For three decades. Can you hear me okay?

Brian Lehrer: I can hear you just fine.

Steve: Okay. I have two comments. First of all, I've never seen in the media, to note that the additional tariffs, for example, the 15% tariffs on stuff from the EU is in addition to existing tariffs. For example, a certain splitters from the EU and the rest of the world have a general rate of 32%. Now, it's going to be 47%. The second comment, is I have-- They've complicated world trade significantly by saying that there'll be an additional 40% tariff for transship merchandise.

In other words, guarding against China transshipping, which has happened. However, transshipping is a federal, civil, and criminal crime, so what they're doing now is they're going to complicate things by saying that, if it has a certain amount of a Chinese components, we're going to consider that transshipping, so, sort of complicates things. That's my two comments.

Brian Lehrer: Steve, thank you very much. Alexandra, I realize you're a personal finance reporter, you're not an international trade reporter, but can you confirm, or refute what the caller was saying there, that basically this 15% is on top of existing tariffs, not instead of them?

Alexandra Svokos: There are with the European deal in particular, because we're still waiting on the specifics to come out. There are some questions of how that will affect certain products across the board. As the caller said, is this going to be in addition to some existing tariffs, or is this just outright replacing all tariffs? We'll have to see, basically, over the next few days.

Brian Lehrer: Right. As more details get released. The President is saying this is such a good deal for Americans, but here's an example of an ABC News article from just this morning headlined, "Tariffs threaten Asian beauty product boom in the US." I'm going to read that again, but accurately. "Tariffs threaten Asian beauty product boom in US." It says, "Asian skincare has been a booming global business for more than a decade with consumers in Europe, North, and South America, and increasingly, the Middle East, snapping up cream, serums, and bombs from South Korea, Japan, and China," but apparently, that's threatened.

I don't know if that, because of the price increase, they may not be competitive as much. Is that an area of personal finance you've looked at yet? Not one I had thought about before.

Alexandra Svokos: It is absolutely. That's absolutely true. Actually, just looking at the announcement from Europe, one of the things that really could impact American consumers is the price of cosmetics. Of course, there's a massive market to go to that ABC article. There's a massive market of South Korean products, in particular, in the US, and that has been growing in recent years.

Definitely, if South Korea is still making a trade negotiation, but if they get hit by a larger tariff, and that ends up impacting prices, it absolutely could affect the market for cosmetics, but to go back to Europe, some French politicians said that they were unhappy with the deal that was announced. If you look at what France is producing, a lot of what we get from there, includes things like cosmetics.

You think of your L'Oréal products, Garnier, LVMH on Sephora, it's all makeup, skin care, all of these things that we buy here in the US, and if those tariffs are-- If they're now facing tariffs that went from 0% to 15%, this could eventually hit consumers, and depending on how much consumers end up getting the price cap, the cost pushed onto them, could end up impacting sales for skin care, and that's true whether it's a product made in South Korea, or whether it's a product made in France.

Brian Lehrer: On the new deal announced yesterday with the EU on tariffs, and again, understanding that you're a personal finance reporter, not an international trade expert, but it sounds like you're staying clued in on this. Let me play a clip of President Trump, and then a clip of the EU leader, who was also at this sit down in front of the media yesterday. First, here's President Trump.

President Trump: It's a very big deal. It's the biggest of all the deals.

Brian Lehrer: It's the biggest of all the deals. It's a very big deal. Sorry, I'm just looking for the name of the EU leader, because I want to get it right, but I did not write it down, but here she is, and then I'll name her.

Ursula von der Leyen: It will bring stability. It will bring predictability. That's very important for our businesses on both sides of the Atlantic.

Brian Lehrer: That was Ursula von der Leyen. I apologize, President of the European Commission. She says, "Stability, stability," and yet the deal, as I read it is, "We're going to not pay anything to export to them, but they are going to pay this 15% to export to us." Why would they make such a deal?

Alexandra Svokos: Stability is really the big point there. Over the last few months since Trump came into office, and since he began threatening and imposing these tariffs across the world, there's been a lot of confusion, and a lot of consternation of what this will end up meaning for companies around the country, so my understanding of that for the European Commission President, is that she's really emphasizing that stability, because having a number just gives companies confidence, and that's something that they've been missing in the last few months.

Because Trump, for example, was threatening to, if they didn't make a deal by August 1st, he would put something like a 30% to 35% tariff, which is massive, massive number. You've got this threat overhead of 35% tariffs. You've got companies pushing for 5% or 10% tariffs, and finally, just knowing a number essentially gives-- That's what I believe she's referring to with that stability comment, is it's just giving companies that confidence of, "Okay, finally, at least we know what we're dealing with."

Brian Lehrer: It's all leverage, right? It's not about everybody being fair to everybody. It's about getting the best deal that President Trump was able to get, because they depend on the US Marketplace so much.

Alexandra Svokos: Yes, I saw a quote over the last day, I can't remember who said it, but somebody-- It was a European business maker, said, "Sometimes when you're expecting a hurricane, when you're preparing for a hurricane, you're perfectly fine just getting a storm," and that, I believe, is the feeling that a lot of business, and market makers have today.

Brian Lehrer: I want to ask you one more thing before we run out of time. From your article about General Motors, you wrote, "Looking ahead, GM plans to invest between $10 billion and $12 billion annually through 2027, with a focus on boosting US production-," keywords, US production, "-in key states. The Orion assembly in Michigan, Fairfax assembly in Kansas, Spring Hill assembly in Tennessee. It says this initiative is part of a larger strategy to improve operational efficiency, and strengthen its manufacturing presence in the US."

In addition to that, from you, I have a Wall Street Journal article here from just the other day. Headline, "Volkswagen Teases Made-in-America Audis After $1.5 Billion Tariff Hit." I guess the question is, is this-- Are those examples evidence that the Trump strategy to any meaningful degree is working? Because he campaigned on the main reason for the tariffs being to bring more manufacturing back to this country.

Alexandra Svokos: It could, and I definitely would understand him touting that, and really raising those headlines, and that information. It is, at the time, this is in a lot of ways a survival mechanism for a company like GM, like Volkswagen, where, okay, you accept, or say that you're accepting this reality that you are facing these tariffs. If cars are not produced in the US, you know that the US is a major buyer, and major source of your profit.

At a certain point, you're going to say, "Okay, fine, we'll start producing in the US," so start producing more in the US in GM's case. That, you can say, "Yes, it is proof that he has pushed things forward." What I think we're going to see, let's say, everything-- Let's say, all the car companies create plants in the United States, and begin manufacturing in the United States. That doesn't necessarily mean that prices are going to go down on cars, because production prices in the United States are higher.

That's why we have a globalized market. That's why we have plants overseas, and offshoring, is whether it's the parts, or the production, the prices are lowered in other places. That's all to say maybe he has success in bringing that work to the United States, but it doesn't necessarily mean that American consumers will see that as a benefit.

Brian Lehrer: Alexandra Svokos, Personal Finance Reporter for Kiplinger, thank you very much. We really appreciate it.

Alexandra Svokos: Thanks, Brian.

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