Why Auto Tariffs Could Backfire for U.S. Car Exports
German carmaker BMW manufactures SUVs in South Carolina, but imports parts from China. (Sean Rayford/Associated Press)
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Politico
4 hours ago
- Politico
The winners and losers in Trump's NATO arms race
NATO members are rushing to show President Donald Trump they're shoveling money into defense — some with a dose of creative math — as Russia's battle with Ukraine grinds on and war threatens to consume the Middle East. The group's summit this week in The Hague, which Trump plans to attend, will attempt to set a deadline for members to spend 5 percent of GDP on defense. Trump has complained about European defense budgets since his first term, claiming the U.S. gets ripped off by countries that rely on Washington for a security blanket. The way allies approach this at the summit is critical. Leaders will need to walk a tightrope between staying on the president's good side — and continuing to benefit from America's role in NATO — and declaring more independence from Washington. As Trump increases pressure, members are touting new investments and shuffling around money — from a 'defense-adjacent' Sicilian bridge to a stopgap German fund. A POLITICO analysis reveals telling gaps between the big spenders in Eastern Europe and those further afield from Russia, who are still creeping toward a decade-old target. The 32 member states break down into three groups: the winners, the risers and the laggards. Most countries occupy a crowded middle ground, not quite racing toward the new 5 percent goal, but making solid progress in exceeding the current 2 percent mark. 'Most of NATO recognizes that it has to be better,' said a U.S. Defense Department official, who like others, was granted anonymity to discuss internal conversations. 'We're looking at these meetings as a very public chance, with the president watching, for them to step up.' Here's how NATO members are faring in the race to spend. Poland has led the pack for the last several years, spending 4.7 percent of its GDP on defense as it splurges on everything from drones to fighter planes. The country, which borders Russia and has dealt with errant missiles killing citizens, is keenly aware of the threat from its eastern flank. That kind of wake-up call has spurred Warsaw to ask the European Commission to shift $6.9 billion of its funding in green projects to defense. The bigger spending has made Poland a favorite in Washington. The Poles are getting creative in their weapons purchases by mixing systems and suppliers from multiple countries to get equipment delivered faster. Poland was the first NATO member to spend billions on South Korean long-range artillery and other systems — a move that other countries frustrated with delayed shipments of U.S. weapons, such as Finland, are emulating. Countries will do 'whatever works' to get to 5 percent, said a diplomat from a NATO member country, including folding infrastructure upgrades into defense spending to push the overall number higher. Estonia, Lithuania and Latvia — former Russian territories that tend to march in lockstep when it comes to defense spending — have outlined plans to hit 5 percent by next year or soon after. They're already among the alliance's top spenders. Baltic officials are embracing a 'porcupine' strategy, modeled off Taiwan's efforts to ward off a Chinese invasion. This involves using small, mobile and lethal weapons fired from shore at any Russian Baltic Sea fleet ships that might threaten them. Greece is a surprise spender on defense, bucking the trend of most Mediterranean countries by dishing out more than 3 percent of its GDP. Prime Minister Kyriakos Mitsotakis in April announced a 12-year, $28 billion defense strategy that will focus on uncrewed vehicles, munitions, drones, satellites and its Achilles' Shield air defense system. The U.S. spends more than any other member on defense, but it still only reaches 3.4 percent of GDP. The country faces its own political challenges in reaching the NATO goal, even with a potential 2035 deadline that allies may recommend at the summit. The United Kingdom and France, Europe's two nuclear states, have made steady increases in recent years but face issues behind the scenes. Britain's defense budget rose from 2.2 percent of GDP in 2023 to 2.3 percent in 2024, with a sharp increase in research and development spending. It also paid extra for major operations such as air defense in the Red Sea and aircraft carriers deployed to the Pacific. Prime Minister Keir Starmer has promised to take that figure to 2.6 percent by 2026 — thanks in part to folding in intelligence and slashing spending on foreign aid. But he's beset by severe budget issues and has not yet set out a path to his goal of hitting even 3 percent. Paris has steadily increased defense spending since President Emmanuel Macron came to power in 2017. But it only hit 2 percent last year. France is one of the European Union's most indebted countries, and public finances are dire. It's unclear how the government would find extra money to reach the 5 percent goal, especially as Macron has ruled out raising taxes. Germany and Sweden have both rewritten their debt rules as they reach 2 percent and aim higher. German governments saw the NATO target as non-binding for years, and only the advent of war in Europe — dubbed the Zeitenwende, or turning point, by former German Chancellor Olaf Scholz — prompted the country to change course. Berlin in 2024 reported 2.1 percent of GDP on defense spending, exceeding the alliance benchmark for the first time since 1990. But the increase doesn't boost combat strength and relies on some fancy accounting. A sizable chunk of the 2024 defense budget came from a special temporary spending fund. Sweden's defense spending surged following its 2024 accession to NATO from 1.5 percent to 2.2 percent of GDP last year. Stockholm is tweaking its debt rules to allow for up to about $30 million in defense loans by 2035. Then there's Turkey. While Ankara has missed the 2 percent mark in recent years, it has a well-developed arms industry and punches above its spending weight in weapons and the size of its military — the second-largest in NATO. Several strategically vital countries hang well below the 5 percent goal, particularly Canada, Spain and Italy. All three have made pledges to catch up. But politics, accounting tricks and historical habits are slowing progress. Canada spends just 1.37 percent of GDP on defense, with key equipment gaps across its forces. Prime Minister Mark Carney this month promised to hit 2 percent 'this fiscal year,' bringing forward a target initially set up for 2029. The lag has deep roots. Ottawa has long relied on U.S. defense guarantees while prioritizing social spending and climate goals. Carney is framing rearmament as a sovereignty issue in light of Trump's threats to annex Canada, but that would require a rapid ramp-up in procurement and industrial capacity. Spain remains NATO's lowest spender, aside from Iceland, which has no army. Madrid spent 1.3 percent of GDP on defense in 2024. Prime Minister Pedro Sánchez has rolled out an €11 billion military upgrade plan to reach 2 percent this year. It's the country's most ambitious defense posture in decades. But Sánchez is boxed in by his governing coalition. Left-wing allies remain opposed to higher military budgets, and previous attempts to raise spending triggered a backlash. He asked Rutte this month, in a letter obtained by POLITICO, for a carveout to the new spending target. 'It is the legitimate right of every government to decide whether or not they are willing to make those sacrifices,' he wrote, saying it would jeopardize the country's welfare system. Italy was only slightly higher at 1.5 percent last year. Prime Minister Giorgia Meloni said the government will hit the 2 percent target this year, but officials suggest that may happen more through clever accounting. Rome wants civilian infrastructure, such as a planned bridge to Sicily, to count as a defense-adjacent goal. Defense spending remains a politically fraught topic as the country faces high debt levels and strong pressure to protect pensions and welfare. This text is a collaboration of the Axel Springer Global Reporters Network. Paul McLeary reported from Washington, Chris Lunday reported from Berlin and Esther Webber reported from London. Jacopo Barigazzi in Brussels, Mike Blanchfield in Ottawa, Jack Detsch in Washington, WELT's Philipp Fritz in Warsaw, Max Griera in Brussels, WELT's Thorsten Jugholt in Berlin and Laura Kayali in Paris contributed to this report.
San Francisco Chronicle
14 hours ago
- San Francisco Chronicle
‘Every car has a tale to tell' at Bay Area's world-famous showcase of vintage vehicles
Mark Zagorski surveyed the fleet of classic cars on Lorton Avenue in Burlingame on Saturday morning before his gaze fell on his 1976 BMW 2002 sitting among them. He was a little nervous, he admitted, wondering what spectators would think. He has spent more than 10 years working on this car, a jalopy fading into decrepitude when he found it rusting away on a repair shop lot in Merced back in 2013. The car was one of dozens being featured this weekend at the 69th annual Hillsborough Concours d'Elegance, the region's longest-running vintage car show and the world's oldest continually running classic car parade and contest. 'Every car has a tale to tell,' said Glen Egan, the world-famous car contest's chairman. 'That's a big part of what I love.' The event began with a kickoff party Friday, followed by a meet-and-greet with car owners Saturday, followed by a two-hour road rally through Bay Area back roads, and then a group lunch. The final event is Sunday's car show at the Crystal Springs Golf Course in Burlingame, highlighting about 200 vintage sports cars built before 1993. Organizers expect 3,000 to 3,500 people to attend, with proceeds from the event supporting several Bay Area nonprofits. Zagorski's story — and that of his BMW — is a saga that stretches back half a century to his first job, as a teenage apprentice at an auto mechanic on Long Island back in 1979. Then 16, Zagorski spent his afternoons and weekends at Little Cars LTD, learning from his old boss, Ivan Snyder. They worked on Volkswagen Beetles and Plymouth Valiants, and the occasional Volvo. He learned how to change oil, rebuild engines, and smooth out dents and dings with Bondo body filler, sanding the work smooth until it looked good as new. He loved taking an engine apart, trying to figure out what was wrong, and putting it back together. 'I was super curious,' he recalled. 'What's in front of me — and how do I get it back to how it should be?' Zagorski paused. No, he said. He wanted to be an engineer. He went to school, got a degree in mechanical engineering, and then spent his career as a sales engineer, working with industrial manufacturing firms. After his sons went to school, however, he began looking for a hobby and in 2013 spotted a BMW 2002 like the one his old boss had owned back when he was getting his hands dirty at that first job at Little Cars. All the wheels were flat. There was a ding on the passenger-side door where a Cadillac had driven into it, the paint was oxidizing badly, the engine block was sitting in the trunk, and the transmission was hanging on the car frame by a coat hanger. He fell in love anyway, and bought it on the spot. He began restoring the car slowly — but the process would ultimately send him to Los Angeles and San Diego, and working with businesses on the East Coast and as far as Germany as he sought to return the car to its former glory. During COVID, his employer grounded all its employees, and Zagorski and his son, Josef, redoubled their efforts. He learned to weld, rebuilding damaged sections of the frame bit by bit. He sent the transmission to specialists on the East Coast, and tinkered on the engine with a neighbor who worked at a nearby machine shop. He found a whole community online of other BMW enthusiasts who helped him source parts and track down experts who could help. During the pandemic, he drove to Los Angeles for business meetings — and picked up an original set of seats and door panels — then drove even farther, to San Diego, to have a specialty upholsterer work on them. Every so often, he called his old boss, talking about the project and asking for advice. He still uses the tools he bought while working for Snyder, a ratchet handle set he got when he was 17. Sometimes, Snyder said, Zagorski's questions were too complex, and he didn't have much to offer. But when Zagorski told him he needed some machining done, he told him not to show up at the auto shop empty-handed — he should take some iced tea with him. 'If you have something in hand, he'll have to stop and talk to you,' he said in a phone interview Friday. 'Because of that, they became good friends.' 'He was a great pair of hands, I wish I had 10 people like him,' Snyder continued. 'I hope his car gets a little recognition.' Zagorski sent the dashboard to a shop in Los Angeles, ordered a carpet kit from another in Texas, and ordered 'a bunch of stuff' from businesses in Germany. He swapped out the engine for a better one and had another auto shop modify the frame to allow for modern shock absorbers. The difference was 'night and day,' he said. Faster. Smoother. Quieter. At 70 mph and 3,000 rpm, the engine purred. 'I just love the way the car drives.' For Vince Chiaro, another concours attendee who was showing his Porsche, the story began as a college student 25 years ago, when he and his landlord bonded over their mutual love of cars. They attended car shows regularly together for more than a decade. A few years ago, the Burlingame resident, now 46, learned that before his landlord died, he'd told his relatives to offer Chiaro the option of buying his treasured 1960 Porsche 356 Roadster. Chiaro didn't hesitate. 'It's a time machine from a simpler era,' he said Saturday, standing in front of the bright red convertible as spectators trickled by. 'It's the intersection of cars, culture and technology,' Egan said. 'There's a level of care and attention these folks put into getting their car to concours level. … It's great to see that.' Saturday's event included nearly 100 classic and luxury vehicles from across the globe: vehicles from Ferrari, Porsche, Maserati, McClaren. There was a meticulous VW bus, lovingly restored, a vintage Ford Bronco. Spectators oohed and aahed as they gazed at the vehicles. 'I want that one!' cried 2½-year-old Elliot Schmidt, pointing at a Ferrari SP2 Monza from the arms of his 34-year-old dad, Chris Schmidt. 'It's the Batmobile!' The supercars sell for $1.8 million. A surprise star of the show was the Oscar Mayer Wienermobile, looming over the low-slung sports cars. Show organizers had requested the Wienermobile for 10 years, said 22-year-old Zoe 'Zoweenie' Smith, one of the vehicle's two drivers. 'We finally made it happen,' she said with a laugh. 'It's amazing to be here with all these amazing classic cars, and everyone is excited to see the Wienermobile.' Steve Turtzo, 42, drank in the cars with his 7-year-old son, Duke. The pair try to go to car shows on weekends, Turtzo said, because Duke loves cars so much. 'It's exciting to see all these cars in pristine condition in our town,' he said as Duke waved at the cars. Just after 10 a.m., the tour's organizers ordered drivers to their vehicles. They had a two-hour journey ahead of them before lunch. Zagorski walked back to his car with his wife, Stephanie D'Ornellas. He climbed in and turned the key. The engine growled to life, joining the hum of motors from dozens of others.
Fox Sports
18 hours ago
- Fox Sports
Daddy's coming home with pole position. Denny Hamlin celebrates new son with top spot at Pocono
Associated Press LONG POND, Pa. (AP) — Pocono Raceway paints its signature black rocks outside the garage in gold lettering with a last name and race car number highlighted to honor some of NASCAR's greats. Jimmie Johnson has one. So does Richard Petty, among others. So where's the celebratory boulder for Denny Hamlin, who holds the track record with seven wins and saw another victory thrown out in 2022 because of a disqualification? Hamlin laughed when he said Pocono officials told him the requirement was, 'either retire or die.' At 44 years old, Hamlin — who just welcomed a son with fiancee Jordan Fish — should have the prime of his life ahead. As for retirement? What, and miss out on all the fun? Even without a Cup championship on his resume, Hamlin remains a dominant force in the sport and he showed again Saturday why he's the driver to beat on the 2 1/2-mile tri-oval track. Hamlin skipped last week's race in Mexico City following his son's birth and returned without missing a beat, turning a lap of 172.599 mph to take the top spot in Sunday's race. 'Truthfully, I'm on a run,' Hamlin said. 'I don't know how else to say it.' Yes, life is good for Hamlin, especially after the couple welcomed their third child, Jameson Drew Hamlin, on June 11. Hamlin shared in a social media post that the baby was delivered at 8 pounds, 4 ounces and was measured at 22 3/4 inches. The name has special meaning: The three-time Daytona 500 champion's given name is James Dennis Alan Hamlin. So his son's name is for James' son and the JD theme is for two men (JD Gibbs and James Dean) who helped launch his career path into NASCAR. Hamlin said a difficult labor and the logistical issues of traveling on short notice to Mexico forced him to miss the race. 'If we were racing at Darlington,' he said, 'I would have been there on race day.' The layoff didn't affect Hamlin. He earned his third NASCAR Cup Series victory of the season and 57th of his career on June 8 at Michigan International Speedway and jumped right back into the top spot at Pocono. Maybe some unexpected rest this week helped Hamlin crush it in the No. 11 Toyota for Joe Gibbs Racing. 'He's slept through the night the last three nights in a row. So it's been really, really great,' Hamlin said. If anything keeps Hamlin stirring at night, it's the acrimonious legal fight with NASCAR that continues to drag in court. A federal judge urged NASCAR and two of its teams to settle their lawsuit that spilled over into tense arguments during a hearing this week. 23XI Racing, which is owned by Hamlin and Michael Jordan, is fighting with NASCAR along with Front Row Motorsports. The two teams say the series is a monopoly, but NASCAR has struck back with a countersuit of its own. Jeffrey Kessler, an attorney representing the teams, said he was open to a settlement. Hamlin said Saturday at Pocono he also was open to a settlement, but said no offer of one had been made on their side and wouldn't be at least until there is a mediation attempt. Kessler said NASCAR was uninterested in a settlement. 'I have stated publicly cooler heads will prevail,' Hamlin said. 'I can tell you this, this is not on our end that needs cooler heads. I think the difference is they're saying different things on their side. We're prepared to go all the way.' Hamlin is going to try and go all the way and win at Pocono with his fifth pole in 36 races at the track. Hamlin is the 5-1 betting favorite to win Sunday, according to BetMGM Sportsbook. 'It's a track that no matter the car we drive or the tires or the aero package, none of that really matters,' Hamlin said. 'You still make speed at this racetrack the same way no matter what car you are driving. I think it's been one of the few tracks I haven't had to change my approach to it depending on the car that I'm driving. I think that's why the success has been sustained.' The rest of the lineup Chris Buescher starts second at Pocono and Carson Hocevar — embroiled in a feud with Ricky Stenhouse Jr., who has vowed retaliation for recent wrecks — is third. John Hunter Nemechek is fourth and Cole Custer fifth. Led by Hamlin, Toyota had six of the top-10 starting spots. Pocono sellout Pocono Raceway continued its renaissance with a third straight sellout crowd set for Sunday. The track sold out all frontstretch seating, premium seating, suites, infield camping and the grandstand camping area. It also is the fifth consecutive year that the entire infield camping inventory has been sold out. Pocono President Ben May said the track sold around 50,000 grandstand tickets, around 2,000 suite seats and 3,300 camping spots. NASCAR traditionally ran two NASCAR weekends at the track until 2022. The sellout streak started the next year and it was the first since 2010. 'When you look at this weekend, it's sold out. It's fantastic,' three-time Cup champion Joey Logano said. NASCAR expressed at least a cursory interest in adding to its recent string of offbeat race locations — everywhere from Mexico City to a temporary track inside the Los Angeles Memorial Coliseum — and floated the idea of holding a race inside a Philadelphia stadium, Franklin Field. The site is traditionally home to the Penn Relays and college football. May said he wasn't necessarily concerned another race within driving distance of the mountains — about 100 miles away — would affect Pocono. 'When you get into center city and Philly proper, it's a stick-and-ball town,' May said. 'I'm very comfortable with Pocono's position on the schedule for a long time.' ___ AP auto racing: recommended
