I have been thinking more about the impact of Car part tariffs....

I have been thinking more about the impact of Car part tariffs. Originally I thought we would see a NdPr drop quickly as auto manufactures scaled down production in anticipation of slower sales caused by higher prices. The tariff is two steps about 3 months apart. So there is an opportunity to avoid the second 15% by bringing in product now. The tariff is applied when the part cross US boarders. For foreign car assembly I believe the opportunities are limited. I am sure they will make a few more cars and ship them before Jan1 but from when a part is ordered made in China then assembled into a car and it’s imported to US I think is close to 3 months, These parts move by boat. Though the trip is about a week the cycle is truck transportation loading travel unloading and overland transportation, That can be over a month. Then assembly and shipping car. So for Non US assembled cars we will probably see decreased demand fairly quickly.

The next is US assembled cars. Here the picture is quite different. All they have to do is bring the part into the US before JAN 1. 15% will cover the cost of keeping the part in inventory for months. So it actually makes sense to advance order these parts now. This would cause a nice spike in Ndpr demand. Followed by a drop in demand in probably late November or December. The parts have to be in US before 1 Jan. The NdPr has to be bought some period of time before that. I thought of Buying Lynas to play this, it is too iffy for me. I do expect to see at least a short term rise in NdPr. ( The more it goes up the harder it will fall late in year early next year. JMO) Even a 5 RMB rise in NdPr should be reflected in the Lynas SP. It has been flat so long that the change should be taken as an indicator. Though this is targeted to China it has a large secondary impact on Japan. I have read articles from Japan, Japan has a problem nearly as big as China. Japan will give Lynas even a bigger premium for their NdPr. What is not known if it will cause China to reverse some of their policy of, ship highest value possible, to keep the REO flowing. A simple move like refunding VAT on shipped REO could have a major impact on Lynas. The wild card in this is if Trump and China unwind this in say February then the manufactures get double hit one they pay 10% tariff two they have tied up cash in inventory.
My sincere hope in all of this is, either China or Trump blinks and this is unwound. I think the possibility of this causing massive disruption in WW markets is very high.
If this does happen I hope some of you will have the chance to make some real money, not paper profits, For me I will sit on sideline just too many variables for me to try.

Some of the most interesting articles on all of this are coming out of Japan. Since they neither support or disprove what I am saying I did not post them. They did cause me to think allot and change my view of next 3 months. I find it interesting that the Japanese press and EU press are more worried about secondary effects than US press. US seems to be interested in only how much price goes up.
One other thought is what banks will do. Many people think US used car prices will rise in tandem with new. Will banks be afraid of these tariffs being unwound with a drop in car prices in the future. If so they will they raise the amount down to protect themselves? All cars are financed regardless if lease or o% interest for some period. The only ones that do not involve financing is when buyer pays in cash. Those are very few.