Marketplace Morning Report Tariffs are starting to show up in car prices
May 20, 2025
Rising tariffs are shaking up the automotive industry, with Subaru hiking prices and GM halting shipments to China. Trade talks with Japan are progressing slowly, raising further concerns. Signs of a potential economic slowdown loom large, as building permits drop amidst inflation worries. Meanwhile, amidst the uncertainty, a startup proposes a unique solution: a slow-moving sleeper train connecting Los Angeles and the Bay Area.
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Tariffs Raise Car Prices
- Higher tariffs are causing automakers like Subaru to raise prices significantly.
- GM is halting shipments to China due to costly tariffs despite a trade truce.
Economic Slowdown Warning Signs
- Economic indicators like the leading economic index signal a slowdown but not a full recession.
- Consumer expectations and building permits have dropped sharply, showing caution in spending and construction.
Challenges for Private Sleeper Trains
- Building profitability in private passenger rail is challenging without real estate development profits.
- Fares must compete with combined cost of flight plus hotel to attract travelers.