Latest news with #SouthCarolina-made
Yahoo
14-05-2025
- Business
- Yahoo
Boeing gets largest ever order of SC-made planes during Trump's Qatar visit
A trio of Boeing 787 Dreamliner planes fly in the sky. (Photo courtesy of Boeing) A $96 billion deal with Qatar Airways will give Boeing its largest order ever for South Carolina-made planes, the White House announced Wednesday. The order of up to 210 jumbo jets is part of an estimated $1.2 trillion economic trade deal between the U.S. and Qatar agreed to while President Donald Trump is visiting the country, according to a White House fact sheet. The agreement is for 130 of the 787 Dreamliners made in Charleston County and 30 of the 777 planes built in Washington state, with an option for an additional 50 planes of some combination of the two, according to a Boeing news release. The order breaks three records for Boeing, the company said: It is the largest ever for its 'widebody jets,' generally meaning jets with two aisles that can carry lots of passengers on long flights. It is the largest for the 787 Dreamliners made in North Charleston. And it is Qatar Airways' largest-ever order. Boeing employs about 8,200 people in South Carolina, most of them in Charleston County. 'We are deeply honored that Qatar Airways has placed this record-breaking order with Boeing, one that solidifies their future fleet with our market-leading widebody airplane family at its center,' Stephanie Pope, president and CEO of Boeing Commercial Airplanes, said in the release. The purchase will make Qatar Airways the largest operator of 787 Dreamliners in the Middle East. The airline already operates more than 150 Boeing airplanes, including 777 and 787 passenger jets and 777 Freighters, according to Boeing. Since 2014, Qatar Airways has ordered 94 777X planes and 30 Dreamliners, according to data from Boeing. The aircraft will be powered by engines from GE Aerospace. Producing and delivering the planes will support 154,000 domestic jobs annually and more than a million positions over the course of production, according to the White House. Deals like the Boeing agreement will help 'drive innovation and prosperity for generations, bolster American manufacturing and technological leadership, and put America on the path to a new Golden Age,' the White House said. The company's CEO Kelley Ortberg joined President Donald Trump and other officials in Doha for the announcement. U.S. Sen. Lindsey Graham emphasized that this was Boeing's largest ever widebody and 787 order, dubbing the deal a 'game changer' for the company and South Carolina. 'Qatar Airways' purchase will ensure the Charleston plant has work for many years to come and it is a validation of the work product coming from the Charleston Boeing facility,' Graham said in a statement. 'The Boeing workforce in South Carolina has a lot to be proud of – they consistently work hard and provide great airplanes.'
Yahoo
11-04-2025
- Automotive
- Yahoo
Tariff-induced trade war could spell double trouble for SC auto industry
BMW vehicles parked at the Port of Charleston Dec. 3, 2020. (File photo provided by BWM) President Donald Trump's fluctuating tariff policies could hit South Carolina's multibillion-dollar auto industry particularly hard — both coming and going. Unlike the big Detroit-based automakers that build more cars and trucks for the U.S. market, automotive manufacturers with facilities in the Palmetto State mostly sell their vehicles overseas. For that reason, these companies could face a double-whammy on prices if Trump administration tariffs go into effect as announced, according to economists. Germany — $3.9 billion S. Korea — $1.3 billion Belgium — $1 billion China — $941 million Canada — $737 million U.K. — $684 million Australia — $491 million Mexico — $229 million (Values in U.S. dollars) Source: U.S. Census Bureau 2024 trade data The first hit, which impacts all United States auto production, could come from tariffs — taxes paid by the importing company or buyer to the government that issued them, in this case the U.S. — on the car parts shipped in to build vehicles. The second, for manufacturers that export cars, could come if other countries respond with tariffs of their own on the finished vehicles sent out on container ships from the Port of Charleston. Sales of South Carolina-made vehicles could ultimately sink if those retaliatory tariffs lead to sticker shock for buyers overseas. 'They're seeing increased cost on the production side, as well as lower demand from their consumer base, so it can hurt them in both ways,' said Joey Von Nessen, an economist at the University of South Carolina who has studied the state's auto industry. If used as a short-term measure to negotiate better deals with trade partners, as some in Trump's sphere have hinted, the impacts on vehicle production are likely to be minimal. But if enacted and kept in place long term, the policy ultimately will lead to increased prices for U.S. consumers regardless of the outcome, Von Nessen added. To date, the Trump administration has enacted a 25% tax paid by importers of foreign steel, aluminum and vehicles, as well as a flat 10% tax on imports from all other countries. For China, the administration has doubled down, enacting a 125% tax on all imports from the Asian country. The president has argued tariffs will help the economy by driving more manufacturing back to the U.S. 'What will happen with tariffs over time — the ultimate goal of the tariffs, and the president says it all the time: Bring your factory here,' U.S. Treasury Secretary Scott Bessent told Fox News last week after the first round of tariffs on foreign-made automobiles kicked in. Hedge fund chief and tariff fan Scott Bessent to lead Treasury under Trump Bessent, a South Carolina native, has long been in favor of tariffs, arguing they're a way for the government to raise tax revenue in the short term and protect and build more domestic industry in the long run. 'I think President Trump is right,' Gov. Henry McMaster also told reporters this week. 'I think his goal is to make the United States independent and self-sufficient, so that we do not have to depend on countries who might not be our friend. That goal is a worthy one and should have been done a long time ago.' In response, Canadian officials have retaliated with 25% tariffs on certain U.S. goods, including fruits and vegetables, appliances, liquor, steel, aluminum and vehicles. China, too, matched the U.S. with retaliatory tariffs. And while the European Union has held out in hope of negotiating, the 27-country bloc readied its own retaliatory tariffs in the event that those trade talks fall through. An ensuing global trade war is of particular concern to South Carolina's export-focused auto industry. BMW's plant in Spartanburg has exported more than 2.7 million vehicles in the past decade – about 63% of total production from the Upstate facility, according to the German automaker. And more than half of Volvos made in Ridgeville are sent overseas, the Swedish auto company has said. Mexico — $2.9 billion Germany — $2 billion Austria — $768 million China — $607 million U.K. — $543 million Canada — $287 million Czech Republic — $287 million Poland — $248 million (Values in U.S. dollars) Source: U.S. Census Bureau 2024 trade data But still to come are 25% tariffs on foreign-made auto parts that go into U.S.-assembled vehicles. These taxes, expected to take effect May 3, will hit even automakers building in the U.S. because the supply chain for these companies is so globally interconnected. The cost of vehicles made and sold in the U.S. could rise by an estimated $3,000 to $7,000 as a result, said Scott Baier, an economist at Clemson University who previously served on the President's Council of Economic Advisors under President George W. Bush and has consulted for the Congressional Budget Office and the U.S. International Trade Commission. In 2024, South Carolina imported billions of dollars' worth of car parts, largely from Germany and Mexico. 'We stress that the concept of a U.S. car maker with parts all from the U.S. is a fictional tale that does not exist and would take years to make this concept a reality,' Wedbush Securities financial analyst Dan Ives wrote in a note to investors last week. And Daniel Roeska, an analyst at the financial management firm Bernstein, told investors that while the vehicle tariff is damaging, the parts tariffs 'could break the system,' pushing suppliers already operating on thin margins to bankruptcy. Furthermore, Baier said, the impacts could expand in ways tariff writers hadn't imagined. Auto insurance, for example, could rise as the cost to repair or replace vehicles goes up in the case of an accident. The first Scout Motors vehicle is not expected to roll off the manufacturing line in Blythewood until late 2027, giving the Volkswagen subsidiary time to adjust to possible tariffs. CEO Scott Keogh told reporters Thursday he anticipates 50% of Scout's supply base will be within 200 miles of the factory once construction of the facility is complete. 'Are we 100% everything localized in the United States as of right now? Absolutely not,' Keogh said. 'But are these decisions that we can make, are these dials that we can turn? We can. So I think Scout's position is good because it was designed for this moment.' Unlike other South Carolina automakers, Scout is building its cars to largely be sold in the U.S. All other vehicles assembled in South Carolina are made up of 32% or less U.S. and Canadian made parts, according to data from the National Highway Traffic Safety Administration. The X3, the second most popular BMW model sold in the U.S., is just 9% U.S. and Canadian made. And while the agency doesn't break down its data further, the Canadian portion of those parts would be subject to tariffs under Trump's proposal. The largest parts of the cars, the engines and transmissions, are brought in from Germany, Austria, the U.K. and Sweden. Volvo also relies heavily on Mexico and China. Scout Motors wants to sell vehicles direct to SC customers. A clash with dealers has efforts on ice. White House Trade Advisor Peter Navarro even called out the Spartanburg plant by name on CNBC Monday saying: 'This business model where BMW and Mercedes come in to … South Carolina, and have us assemble German engines and Austrian transmissions. That doesn't work for America. It's bad for our economics. It's bad for our national security. We want them to come here.' BMW snapped back, defending its record and highlighting the more than 11,000 people it employs, the 1,500 vehicles those workers assemble daily and the $14.8 billion it has invested in its Upstate plant over the past three decades. South Carolina also boasts auto suppliers, lured to the state by BMW's presence, that make everything from tires and powertrain components to seats, mirrors, exhaust systems and brake parts. 'It is impossible to overstate the profoundly positive impact of the automotive industry on our great state — from our economy to our people and our communities,' said Sara Hazzard, president of the South Carolina Manufacturers Alliance. 'Thousands of families depend on the jobs generated by this billion-dollar industry, which has transformed our state in the eyes of the world for over half of a century.' For its part, BMW has continued to urge negotiations between the U.S. and E.U. 'Free trade and international cooperation are of immense importance worldwide, serving as key drivers of growth and progress,' spokeswoman Nathalie Bauters said in a statement. 'Both sides should quickly reach a transatlantic agreement that fosters growth. This would also benefit consumers on both sides of the Atlantic.' Still, if tariffs stay in place, there are some early indicators that some automakers might be willing to move factories to get a piece of the U.S. market. Hyundai, for example, has pledged to build a new steel plant in Louisiana. And Honda has named Indiana for production of its hybrid Civic. SC readying training for EV workers across the state. Here's what job seekers can expect. 'The American market is so large; we're one of the biggest markets in the world,' Von Nessen said. 'And, so, manufacturers and companies do want access to the American customer base.' And in South Carolina, Volvo has talked about increasing production levels. Former CEO Hakan Samuelsson unexpectedly returned to the helm last week as Volvo's stock prices have struggled in recent months. At the company's annual meeting in Gothenburg, he told investors Volvo has extra space at its plant in Ridgeville — space that could be used to produce a model that will sell better in the U.S. than the current all-electric EX90. 'I think the next car should be some car with a high volume in the U.S. … I don't know exactly what that car would be,' he told Reuters. But Von Nessen cautioned that these are just announcements. Actual investment has yet to take place. 'The bottom line is that the costs of tariffs are typically immediate,' he said. 'The benefits, if they appear and to the extent they appear, can take a much longer time to be realized.' Even if we do see investments in the U.S., he said, it'll still mean higher prices for consumers, as the cost of those new auto and parts manufacturing facilities get baked into the cars' price tags. Due to the rapid-fire pace of these tariff announcements, Von Nessen doesn't expect companies to make manufacturing choices any time soon. 'We have this period of uncertainty, and they are essentially holding off on investment decisions until they have a clear understanding of what their cost structure is going to look like,' he said. This uncertainty could also start showing up in U.S. jobs numbers, Baier said. 'From the perspective of a hiring manager, in any industry, it's hard to forecast demand,' he said. 'They may not let anybody go, but they're certainly not going to bring anyone on.' So far, the Trump administration has backed away from its most controversial tariff proposal, pausing sweeping tax increases on goods from more than 75 countries he said were willing to negotiate new trade deals. On Wednesday, he suspended for 90 days the tariffs he unveiled a week earlier, with the huge exception of China, and the stock market soared. Bessent, the treasury secretary, claimed the abrupt turnaround was Trump's 'strategy all along' to create maximum leverage. But for a week, the announced tariffs roiled the stock market and baffled economists. Markets revive after Trump sets 90-day pause on many tariffs, hikes China to 125% 'These are big taxes,' Baier said. 'This is so widespread and the numbers are so high, it's like nothing we've ever seen before.' And South Carolina, as a port state with a large number of international companies, may be more tied globally to the effects of a downturn, according to the state's revenue forecasters. 'Whatever is happening with a global economy is going to be affecting, to a bigger degree, the economy of South Carolina than many other states,' staff economist Karl Vesely told members of the state's Board of Economic Advisors on Thursday. U.S. Federal Reserve Chairman Jerome Powell called the expansive new tariffs and their possible economic impact 'significantly larger than expected.' But Powell also indicated the Fed would 'wait for greater clarity before considering any adjustments' to interest rates as it keeps a close watch on inflation. Analysts at Goldman Sachs sounded the alarm on a possible recession only to pull back slightly after the president's reversal. But the rollback offered no reprieve for the auto sector and left many still wondering what will happen in 90 days. Economists from Wall Street firms such as Capital Economics and Moody's predict consumers will start to see noticeably higher prices by summer if the current tariffs remain in place or are raised. 'The loss in purchasing power that consumers have experienced over the last several years, that's the key for thinking about the likelihood of a recession this year,' Von Nessen said. 'Consumers are still worse off today, from a purchasing power perspective, than they were on the eve of the pandemic in 2019.' Prices in the U.S. over that time period have gone up by 25%, while wages have risen by about 20%. 'The concern is that tariffs could reignite inflation and basically keep that gap from from closing,' Von Nessen said.
