[IanH]

Tariffs are not levied on the cost of the item, that is far to easy to fake and would rely on the importer telling the real cost.

The tariffs would be assessed on the price the dealer pays to bmw to get the car... which in this case would be the invoice price.

[manitou202]

Originally Posted by IanH

Tariffs are not levied on the cost of the item, that is far to easy to fake and would rely on the importer telling the real cost.

The tariffs would be assessed on the price the dealer pays to bmw to get the car... which in this case would be the invoice price.

It's illegal to fake, and BMW would face fines and penalties if caught. A small company might try to get away with this, but large corporations aren't going to take the risk. There might be small amounts you can fudge, but it would have very little impact.

At my company we have a Trade / Compliance group that goes through the Bill of Material for every product we import into the US from Mexico. We need to identify the country of origin, and part classification for each components, along with the cost. For the cost we need to show a PO/Invoice from a third party supplier, or for components made internally, we need to show a costed BOM (material plus labor).

Here is an example of Tariff codes for automotive components. Each major sub-assembly or component needs to be assigned a code. Some classifications have higher tariffs, as do some countries of origin. It's crazy complicated.

https://www.trade.gov/automotive-parts-tariff-codes

[techwhiz1]

Originally Posted by IanH

Tariffs are not levied on the cost of the item, that is far to easy to fake and would rely on the importer telling the real cost.

The tariffs would be assessed on the price the dealer pays to bmw to get the car... which in this case would be the invoice price.

Actually BMW AG sell the car to BMW USA at a wholesale price and the car is turn sold to the dealer then to the customer.

The tariff will be on the price sold to BMW USA. This has to be a real price or they will fine and claw back money from BMW.

For tried some shenanigans with van imports and got caught.

[Carefree]

Originally Posted by Mani59

Hello all,

A reminder that please do not post any political posts as these will be deleted and may lead to the entire thread being deleted.

We have, for several years, prohibited the posting of any religious and political posts which you can read about here.

Thanks, Mani

Thank you.
The irony here is most of the zealots don’t fully understand the politics and reasons for tariffs. They live in a mismanaged land of burning cities, no water, and useless smelt.
Go figure.

[ASAP]

Originally Posted by techwhiz1

Actually BMW AG sell the car to BMW USA at a wholesale price and the car is turn sold to the dealer then to the customer.

The tariff will be on the price sold to BMW USA. This has to be a real price or they will fine and claw back money from BMW.

For tried some shenanigans with van imports and got caught.

not the wholesale but transfer price... we have no idea how bmw accounts for their inter company sales

[BroDoze]

Thanks mods. Critical thinking just may prevail yet!

[Bumpinjeep]

Well, its Feb 1st and the price of the car hasn't changed on BMWs website. Dealers haven't heard anything. No changes.

[Carefree]

Originally Posted by Bumpinjeep

Well, its Feb 1st and the price of the car hasn't changed on BMWs website. Dealers haven't heard anything. No changes.

False Alarm.

[M2M3M3]

Originally Posted by Bumpinjeep

Well, its Feb 1st and the price of the car hasn't changed on BMWs website. Dealers haven't heard anything. No changes.

Of course none of that will change on day one. Duh.
It will take a bit for the decree to be passed down the chain, clarified(if that is even possible given the state of the rest of his orders) and implemented.

And then the companies have to figure out how they are going to deal with it.

I would not be surprised if BMW just stacked all the cars in the factory parking lot rather than shipping as they wait for the chaos to maybe subside. That may explain why the status of so many of the cars folks have ordered all appear to be stuck at QC or Final Assembly stage for the last week or so.

[bloung5]

Yeah i'm interested to see what will happen. I have an order confirmed, I think spot 112 awaiting production, was thinking of picking up one with the same spec that jsut got delivered basically kind of thinking well they aren't going to be cheaper and as long as it's offered at msrp. Figure the more rational move is to cool my bridges, the sky isn't falling.

[Tag]

Tariffs are supposed to take effect today, but they have not officially gone into effect yet. Everyone is waiting to find out what goods will be tariffed, at what rate and what exclusions if any there will be. Don't expect any manufacturer to immediately raise prices if they go into effect. Economic impacts like this take time to make their way to market. Let's all hope some deal is made so everyone gets what they want, and consumers don't get hurt.

[spurcap]

Originally Posted by ASAP

tarrifs aren't levied on the retail price of a product lol... i don't know why anyone thinks that... they are levied on the transfer price of a product from one country to another... that ultimately depends on how BMW manages their accounting

they could sell the car for $1 from BMW manufacturing to BMW NA and then there is virtually no tariff... the reality is somewhere in between however i hope no one thinks an m2 price will go up 25%... because if it does, it means BMW is taking advantage of the consumer and the situation... this happened last time when tarrifs were levied by many companies

Your first paragraph is correct to some degree. Acknowledging we know nothing about the rules absent it being written and passed, research 'transfer pricing' ... there are established tax rules around common control/intercompany transactions and it would be very surprising if similar rules didn't apply to any tarrifs... unless the goal is to make them effectively spineless and only for pomp.

You are correct that on the surface they don't get added to retail price. But retail price is set by the seller and they aren't simply going to absorb the cost - At least in full. That said, the peso likely will fall a lot with a major US tarrif and that could reduce some of their other costs in Mexico so it is possible the msrp doesn't simply raise by the tarrif %. If they continue to sell the car they will find a price they think the market will absorb or they won't sell it at all (which is another possibility).

[spurcap]

Originally Posted by Bumpinjeep

Well, its Feb 1st and the price of the car hasn't changed on BMWs website. Dealers haven't heard anything. No changes.

I wouldn't read too much into this one way or another. As of now there are no tarrifs, just public statements by the admin that they plan on implementing today. BMW isn't going to do anything until something is actually signed and implemented. And then there could be a delay as they respond to the actual requirements written.