Big 3 Exempt From Tariffs?, “The Trump Effect”, Paul and Kyle In The Wild

Today, we’re bringing you the latest information on how tariffs could affect the auto industry, including the Commerce Secretary hinting that President Trump could exempt the auto industry. Plus, we’re covering how Honda is bringing Civic production back to Indiana, and Paul and Kyle’s wild adventures this weekend.

Show Notes with links:

• In a primetime address to Congress, former President Donald Trump defended his sweeping tariffs, acknowledging a potential "adjustment period" but emphasizing the tariffs' role in boosting the U.S. economy. 
  • As many as 20,000 vehicles per day could be cut from North American production due to parts shortages and high costs.
  • Parts stockpiles could run out within a week, even after companies moved as many parts as possible across the border ahead of the tariff deadline, according to Stephanie Brinley, principal automotive analyst at S&P Global Mobility.
  • Many suppliers cannot absorb added costs and may push automakers to cover tariffs, potentially halting parts supply.
  • Tariffs on steel and aluminum will increase to 25% on March 12, with further auto import tariffs possibly starting April 2.
  • If tariffs persist, North American vehicle sales could drop 10%, and smaller suppliers might need financial assistance to survive.
  • In an interview with Bloomberg this morning, Commerce Secretary Howard Lutnick hinted that President Donald Trump may exclude certain sectors, including autos, from the 25% tariffs on Canada and Mexico. The decision could favor industries that comply with the United States-Mexico-Canada Agreement (USMCA) content provisions.
    • “My understanding is the Big Three say they produce cars that are compliant under USMCA, which means they have sufficient U.S content in them to be part of the USMCA agreement,”

• The White House celebrated a "Monday morning win" as Honda announced plans to move production of its Civic model from Mexico to Indiana, beginning in May 2028. The move was touted as part of "the Trump effect." 
  • The Indiana plant is expected to produce about 210,000 Civics annually.
  • Honda did not confirm the change directly, instead emphasizing its ability to adjust production based on customer needs and market conditions, and highlighting its history of building the Civic in Indiana since 2008.
  • Trump supporters, including economist Stephen Moore and Senator Jim Banks, praised the move as a sign that tariffs are driving "made-in-America" job growth.
  • Senator Jim Banks stated, "President Trump has taken the ‘kick me’ sign off the backs of our workers and manufacturers. This report is great news for Hoosiers and all Americans — and it’s only just the beginning."

• Paul and Kyle made some trouble this past weekend, with Paul buying an EV and learning some valuable lessons about the state of charging infrastructure. Meanwhile, Kyle spent some time in NYC and visited a 3 Michelin Star restaurant. 

Hosts: Paul J Daly and Kyle Mountsier

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Transcript

Paul J Daly: 0:00

I'm a little slow on the record button, but I got it. It's been a few days since we've been together running a show. But today we're talking, of course, about tariffs, three star Michelin restaurants. Me and you in the wild, the fact that we are only 69 days away from the bowl, ambitious automotive accelerator event in this industry, ASOTU CON, presented by Reynolds and Reynolds and goo goo. I'm just ready today.

Unknown: 0:31

It's the triple A of automotive events, the ambitious automotive accelerator. I'm all about it. Most

Paul J Daly: 0:38

ambitious one. You know,

Kyle Mountsier: 0:41

we couldn't do this without the partners, obviously, right? Because we try and keep tickets reasonable as far as a price point. So Reynolds, goober goo, the whole team there for throwing down being the presenting sponsor, second year in a row. Yes, companies like space auto that are going to be taking on our podcast stage this year and making that an epic stage. Clairvoy, automotive mastermind, for jumping in and making sure that we have our breakout stages set up in those rooms, having a feel and a vibe and countless others that I was

Paul J Daly: 1:13

gonna say, Boy, I'm proud of you for going in hard on that. Because if you don't have a list in front of you, I'm always deathly afraid I'm gonna miss somebody. There's gonna be a lot of other people that we talked about, because we have a whole array of people that have banded together to make this event possible, which is probably appropriately why we are theming the event this year as converge. The word converge, because this is where truly people from all sectors of the industry, and even this year, an international contingent is coming to ASOTU CON. These are the people who are working hard, day in day out, whether in the dealerships on the front lines or developing products and services to support those dealerships online that believe that thriving people are the only key to success, for profits, culture, technology and how all those things come together. So, you know, Todd Caputo said yesterday in the morning show, he's talking about the, you know, nada versus ASOTU CON. Nada is a totally different thing. In my opinion, ASOTU CON is where you can be together with pretty much everybody at the event. It'll be around 700 people, which sounds like a lot, but the venue is so perfectly oriented to feel like those 700 people are family when it comes to meals and hugs and handshakes and asking questions and sharing what you're doing staying in the same venue. People don't wander everywhere at this event. They stay put, and so it's just a great place to be. If you haven't gotten your tickets yet, you should get them at ASOTU con.com if you're already planning on going, or you have your tickets, please make sure you book your hotel room ASAP. You can do that right from the site, because the event hotel will fill up super, super fast.

Unknown: 2:51

Oh, it already is. It's like ripping through. So you don't want to miss out on that.

Paul J Daly: 2:55

There's no more rooms to open up. Literally, we book out pretty much this entire casino hotel with our people, and there's a lot of other options around but you know, if you want to be close in that venue, we have a ride share partnership this year, which we didn't last year. Is that locked? Are we talking about that yet? It's not locked. Okay, we're not gonna talk about that yet. But just so you know, we're putting pulling out all the stops. You really should check it out and be there if you've always wanted to go. This is definitely the year to get there. Get the tickets, get the hotel rooms. If you want to sponsor, we still have some stuff available, and we can make sure you get everything. And a lot of times, like, with the sponsorships, if you're going to send some of your people, it makes a lot of sense, because the sponsorships come with tickets, and we're not, like some of it, like, we don't just throw tickets out because we are limited by capacity, and so, you know, your ticket costs, if you can make it a part of the sponsorship, I think that's even more bang for the buck if you're coming. So you hope you come.

Kyle Mountsier: 3:49

Come on, get in there. Let's

Paul J Daly: 3:51

go. All right, we're going to talk about some news. Obviously, we're going to talk about tariffs. And then for our third story, we usually do three stories. The last one's a little more retail. Kyle and I had a few experiences over the last couple days, separately that we're going to jam on. Kyle's experience at a three star Michelin restaurant, my experience driving an EV home from like 800 miles away. I learned two or three things about the charging infrastructure in the United States, or at least, a lot of things this

Kyle Mountsier: 4:17

weekend we did. All

Paul J Daly: 4:18

right, let's talk about tariffs. This is the big deal. Big conversation. Last night. I didn't get to watch it. I was so tired, but in a prime time address to Congress, the largest ever on record, by the way, the longest ever on record, over two hours of president, Donald Trump defended his sweeping tariffs, acknowledging a potential adjustment period, but emphasizing the tariffs role in boosting the US economy, as many as 20,000 vehicles per day could be cut from North American production due to parts shortages and high cost stockpiles could run out within a week, even after companies move as many parts as possible into being manufactured in the US or they try to get them across the border as soon as possible, according. This. Stephanie Brian Lee, principal automotive analyst at S and P Global Mobility, basically, a lot of suppliers can absorb the added cost. That's no big surprise. Margins on those are already running pretty efficiently. Tariffs on steel and aluminum will increase to 25% on March 12, with no with further auto import tariffs, possibly starting by April 2, if they persist, North American vehicle sales, some people are saying, could drop 10% and smaller suppliers might need some financial assistance to survive. However, in an update that just happened moments before the show, that Nathan plugged in and an interview with Bloomberg this morning, Commerce Secretary Howard lutnic, hinted that President Donald Trump may exclude certain sectors, including autos, from the 25% tariffs on Canada and Mexico. The decision could definitely favor industry that comply with the US Mexico, Canada agreement, usmca, with all those content provisions. And here is the quote, my understanding is, the big three say they produce cars that are compliant under US MCA, which means they have sufficient us content in them to be part of that agreement. So

Kyle Mountsier: 6:08

what a roller coaster it is. It's a roller coaster. Obviously there was, you know, there was a lot more discussed last night, but the tariffs were what's on everyone's mind. There's apparently going to be a little bit more expansive kind of, like stuff coming at some point today, around the tariffs, around what's happening, you know, obviously this is retaliation after retaliation. You can see, you know, the goal of potential long term benefit on us, profitability, moving manufacturing here, opportunities that you know, over the next two to three years could take place, but the short term disadvantage that the automotive industry and other industries could potentially have, you know, there's speculation that it could wreak havoc. I think that, you know, for manufacturers that have high day supply, they're going, Hey, look, we're going to be fine here. The manufacturers that have a little lower day supply, like a Toyota that's already managing a 14 to 19 day supply. I think this is where maybe you start to get a little bit held back on any discounts, or maneuvering off pricing, just because there could be scarcity of inventory over the short term, or pricing disadvantages for customers. So still, a lot like I would say, this is not freak out mode. This is Watch and listen and learn mode at this point, because we don't know the exact impacts that this is going to have, but we'll have a lot unfolding over the next week or two, still wild that 20,000 vehicles per day could be cut from North American production. As an estimate, that's, uh, that's a that's a hefty hill to climb. Used Car markets about to heat up, but,

Paul J Daly: 7:45

but, yeah. I mean, I think you, you said it best, like it 20,000 vehicles could hurt some more than a lot others, a lot of others. Um, but, yeah, thinking about, like, how is a dealership or a dealer going to think about and think through and react like you said, it's not freak out mode. OEMs obviously have to pay a lot of attention to this. The trickle down effect is going to be a little bit slower if the tariffs come in place. I think there's a lot of attention on in the White House, on protecting the American economy, right? So I think, like automotive, the American economy already talking about excluding some sectors, but without a doubt used car market. It can't help but but feel the pressure if new car supply goes down or gets very expensive again. Yep, right. All of a sudden those used cars, what a volatile ride I'm here. We're going to pivot right into the second story, because this story does have a lot to do with the first story. The White House did celebrate an early win yesterday as Honda announced plans to move production of its civic from Mexico to Indiana, beginning in 2028 the move was touted as part of the quote Trump effect. Indiana plan is expected to produce about 210,000 civics annually. Honda didn't confirm the change directly, instead emphasizing its ability to adjust production based on customer needs and market conditions, and highlighting its history of building the Civic in Indiana, since 2008 Trump supporters, including economist even more said and Senator Jim banks praise the move as a sign that tariffs are driving Made in America job growth. Senator banks also stating President Trump has taken the kick. Me sign off the backs of workers and manufacturers. This report is great news for Hoosiers and all Americans, and it's only just the beginning. So what

Kyle Mountsier: 9:27

a look, what a quote. I think Senator Jim Banks has been holding the kick me sign quote for quite some there's a meme that goes with that like, there's definitely a meme that goes for that. Here's, here's, what's, you know, in relation to my comments in the first story you look at this is a 2028, goal, right? So it's a three year away goal, and you're gonna see these long term impacts. You know, they're expecting this four year term to continue, have to have more of these iterations, you know, that are that we're seeing in the first 100 days. So that's why the targets on this 20. 828, like, it takes a while to move manufacturing production, all of those types of things stateside. Some of these OEMs already have plenty of production here. So I think you'll start to see migrations over short term, but we'll see if it's enough, like a little too early, little too late, to kind of balance pricing and production there. You

Paul J Daly: 10:19

know, I think with the jobs situation we talked about in the first story. One of the things that if you just think about how we typically respond to things as an economy, it's very reactionary, right? Inflation is up, inflation jobs are up. Jobs are down. This type of move is a move that isn't going to increase jobs immediately. But, I mean, how often are we doing things over 12 and 24 months in the government, this is just like uncharted territory. It is. It's wild, right? And we'll see. I mean, like, that's the that's what the Trump administration is banking on. They're saying, actually, it takes a little disruption to actually make a change, but it's not going to be long. It's basically the sentiment that's coming. So we'll do what we always do. We'll hang on. We'll make great decisions in the day, and if you want to leave it to anyone to figure out how to serve people and how to make a business work, it is the entrepreneurial nature of car dealers for sure. All right, you and I had a couple of interesting or talkable experiences over the last four days. I'll go first, because I want yours as much more retail. So I I bought my first EV. We're gonna reveal what it is today. I know we were a little slow getting the getting the vlog out, but I wanted to make sure we release it this way. So today we're gonna release the vlog on what TV I chose, however. My son miles and I went and picked it up, and we drove it from Charlotte, North Carolina, back to Syracuse, New York, which is just about 800 miles. And some people were like, are you really gonna do that? I was like, Yeah, I'm gonna do it. Look, I have my little plan. It's usually, like, an 11 hour drive. I was like, three charging stops will be good. Well, what I found out was charging an EV over a long distance, even in the pretty populated quarter of Charlotte. It's not like I was in North

Unknown: 11:56

you're going through you're going through Virginia, DC, like you're going through

Paul J Daly: 12:00

all those, yeah, absolutely. Maryland, right through Harrisburg. It was quite complicated, and we had about a 23 hour day because we flew out early, then we left Charlotte at like 10am and we didn't get back to Syracuse till 3am

Kyle Mountsier: 12:16

I was thinking, I think that the most interesting part you were telling me a little bit about your story, the most interesting part to me, and I'll reveal one thing, is the fact that you've got these charging networks that are, like, locked to a vehicle type, potentially, potentially, and that's just something that you you that you don't go up to a gas station and be like, I wonder if they'll take my fork. You have my kind of gas Yeah, no, I wonder if they'll take my Toyota, I'm not sure. Yeah, this Sienna might not fit the the gas pump here,

Paul J Daly: 12:46

I'll tell you what there were. There are several, several instances that surprised me, and now, like, in hindsight, after that one experience, I think I can fix most of those. The first quote, unquote, fast charger I went to only charged at 40 kilowatts, which, if you know, like, you know, fast charge should be like 150 to 350 right? So I lost a ton of time there because I had to wait for charge and then make alternate plans. I went to a Tesla charging site, but I didn't get a Tesla, and that's pretty common knowledge right now, but a non Tesla and that that we got that to work, and that was how to figure it out. The next Tesla site I went to, I was like, Why isn't this not showing up on the app? Because we use Google Tesla super charging site. And I realized not all Tesla sites are partner charging sites. My vehicle type wasn't listed, so it wasn't even allowing me to charge there. You know, ended up finding another one. Now we'll say GM surprise horse bailed me out, whatever. But we're gonna release the vlog for that. But all to say, there's some significant issues around charging that we will never have an easy time selling EVs as an industry until this stuff is figured out, because it is real and I'm pretty, pretty resourceful person, like, I'm a pretty solid problem solver, and I know how to get around, and I can't even imagine

Kyle Mountsier: 13:59

planning this for a couple weeks, like you knew the route, you knew what you literally

Paul J Daly: 14:03

Kyle all the problems we talk about in these articles that we cover every day, all the problems, oh, and this and that, it's like I had them all. I had them all even though I knew about them. So, yeah, that was gonna release the vlog. I think we released the vlog on my personal page today on LinkedIn, and we're gonna talk about it, and we'll talk about the charging journey. But you and I had a conversation. I wish you had a vlog of this one, but you took your wife out for a special anniversary celebration in New York City. And tell tell us what it was like. You tell me a little bit.

Kyle Mountsier: 14:31

So I went to a three Michelin star restaurant. And you know, I knew going called per se. So it's on Columbus Circle, right outside of Central Park. It overlooks Central Park. It's gorgeous. You know, the things that they did, obviously, like, I'm going to say, the food, obviously, absolutely incredible. You know, it's just little bites along the way. Every bite is packed with a punch. They don't repeat. This is a restaurant that they don't repeat a single. Ingredient the entire meal. Whoa, so that's a, that's kind of a shocking you can do that realization nine courses, not a single ingredient outside of, like, I think they, you know, they exclude, like, butter and salt, yeah, of course, like that, but, like, your major ingredients, but the unique things, right? I've reserved online. It was very easy. Actually. I had to, how

Paul J Daly: 15:24

long did you reserve? Well, what's that? How far ahead Did

Kyle Mountsier: 15:27

you reserve? Well? So I, you know, I kind of, we were going to go one place, and then I and then I realized that this was close to our hotel, and I was like, Alright, I'm going to do that. It wasn't available, but I was able to put my name on a waiting list. And the like, the even the process, the digital process of like, notifying me that there was an available spot was so clean. But then when we reserved, our reservation was for 5/31 of all, they emailed me a very personalized note. It was clearly personalized because they noted some specific things from my reservation on questions that they asked, just like unique questions that you know, if you just ask those up front, you now know something about that person, and that's actually caring, right? You don't have to go find those things out separately. So that was interesting. But also, you know, they started with yeses, right? I said, Hey, we've got a place to be at 730 it looks like this is a two hour dinner affair. Is there a way that we can come early? Yes, not a problem. We'll take care of you missed amounts here, and they just continued with yeses the entire time. And I thought that that was really interesting. But the most impressive part, you know, this is a price fix. It's a, it's a, it's a fixed menu. The menu changes every day. They only have certain things. My wife has about $8 sheets, and they accommodated them flawlessly throughout the night. That's and that's the deal. And this is what is so amazing to me. And when it comes to like training and preparation, if you if you know these these restaurants at this level, every single day, they change the menu, every single item on that menu, and every person that brought food out knew every ingredient that was on each of our plates. That's down to the ingredients in my wife's allergy free menu that they were curating on site, like they were that aware. They were that intentional. They were very clear with their presentation to make sure that she was confident in every bite that she was eating, like, it's Wow, and all of those things, the things that made the experience feel great are things you could do at an Applebee's right? Wow. Does that make like, all of those things you could do anywhere the food, obviously, is what you know, of course, why the price point and some of the food and the ingredients and the chefs and things like that, but all of the things that made the experience feel great, those you could do anywhere, that's

Paul J Daly: 17:49

unbelievable. That's unbelievable. I mean, like, these are the experience. And when you said, your wife said to I don't mess it up, but I'm going to say it. But I think she said, anything else I eat from now on, is just nourishment. That's exactly what she said, that good and that amazing. I wish you had a vlog of that. I'm sure we'll hear more stories as that comes out. But legitimately, look, it's good to have something we can look at, to just take little clues, right? Everyone can't do this all the time, but even just the knowledgeability of your staff is something that just takes regular intentionality, right? And it sets the expectation. I mean, will

Kyle Mountsier: 18:26

Gadara talks about it all the day, all the time? It's the it's the effort that you put into the premium, right? And it's not just like, oh, I showed up that day and hopefully I remember to say the right thing. It's like an effort to have the right meeting, to train the staff, to commit them to that day, and I think that that's something that we can do very easily in the realm of automotive. Couple

Paul J Daly: 18:45

comments here from the live stream, John Roper saying that's unreasonable in the vein of hospitality, much Doug Klassen asks, is there any buying regret now that the charging situation is real, zero buying regret. I just knew from the beginning I will not be taking any long trips in this vehicle. So I'm not worried about that. Brian Ortega, that's a crazy drive. It was a crazy and exhausting drive. Listen, everybody, it's Wednesday. You have a lot of lot of runway this week if you don't have to spend a ton of money, but you can't be extra thoughtful today in how you're training your team, taking care of your people. So go do that. We got your bag and go to ASOTU CON com and get your tickets. You.