By:Izzy Bigari
Chrysler is planning to move some of their production of their cars over to the United States from Mexico. However, they are still planning on keeping most of the production in Mexico. On January 28th, President Trump sent out a tweet saying, “Our economy is better than it has been in many decades. Businesses are coming back to America like never before. Chrysler, as an example, is leaving Mexico and coming back to the USA. Unemployment is nearing record lows. We are back on the right track!” This statement isn’t entirely true, but it is still good for the United States’ GDP.
So why does this matter? Well, Chrysler moving some of their production over to the USA will help our country’s GDP. These items would be newly produced and would be made in the USA so they would fall under the investment spending category. All the Chrysler cars made in Mexico would be removed from our country’s GDP as they fall under the imports category and would be subtracted out of the equation. So with Chrysler having production be in both Mexico and the USA, this will both help our GDP and diminish our GDP as the cars are being produced in 2 different countries. Overall, Chrysler moving some production back to the United States is good and will help our country’s GDP.
Works Cited
ACDCLeadership. “Macro Unit 2.6- GDP Deflator Practice AP Macroeconomics.” YouTube, YouTube, 4 Feb. 2012, www.youtube.com/watch?v=gqm--7s0Ks4.Fiat Chrysler has six plants in Mexico. “No, Mr. President, Chrysler Isn't Leaving Mexico.” CNNMoney, Cable News Network, money.cnn.com/2018/01/29/news/companies/trump-chrysler-mexico-tweet/index.html?iid=hp-grid-dom.
Trump, Donald J. “Our Economy Is Better than It Has Been in Many Decades. Businesses Are
Coming Back to America like Never before. Chrysler, as an Example, Is Leaving Mexico and Coming Back to the USA. Unemployment Is Nearing Record Lows. We Are on the Right Track!” Twitter, Twitter, 28 Jan. 2018, twitter.com/realDonaldTrump/status/957603804383465472?ref_src=twsrc^google|twcamp^serp|twgr^tweet.
As you mentioned, it’s important to note that Trump’s tweet is not entirely true as not all Chrysler production will be moved to the US, since Chrysler will still maintain several plants in Mexico. Nonetheless, this new industry in the US will definitely improve our GDP, and will also aid in further decreasing the already low unemployment rate of the US. Oppositely, Mexico could experience negative economic effects due to Chrysler moving some of its production to the US. Among these possibilities include a lower GDP and a higher unemployment rate for Mexico. Additionally, it will be interesting to see if other foreign automobile manufacturers will shift some production to the US due to the current success of our economy.
ReplyDeleteI do like how you really honed in on the current introduction to Macroeconomics, and specifically, GDP and its calculation. I do agree with the theory that increasing the US’s GDP may occur as more companies move “back into” the nation, however, I am not entirely sure about the validity of that statement. For example, I am unsure if Chrysler will actually produce their vehicles here, or may just assemble them here. If the metal and parts are still being produced in Mexico, they will still count as foreign products and will not be included in the nation’s GDP. If the company itself does virtually everything in the USA, then it will increase the GDP. Over time, some companies may move back, but also...doing things in other countries - like recycling e-waste - is cheaper, therefore, we will send it overseas to be disposed of.
ReplyDeleteAlthough Chrysler is moving some parts of their automobile manufacturing company back to the United States, the leftover parts are still remaining in Mexico. Because these parts are still in Mexico, when calculating the USA’s GDP, some Chrysler products will still be counted as imports and not count towards America’s GDP but rather Mexico’s as the products are being manufactured and shipped out of that country. This directly impacts the United States because they have to split potential increases in their own GDP with another country which is not very useful to them in the long run.
ReplyDeleteI liked how you talked about the issue as a positive. Yes although Chrysler is moving back to the U.S the production is still able to help out the country they were in for quite some time. You talked about how it would help both countries with their GDP and I agree. Although Trump wasn't 100% true with his statement, it did show that the U.S is getting better and improving.
ReplyDeleteI agree that Chrysler’s move to the United States from Mexico will be a good thing for the US. Chrysler’s shift will improve our country’s GDP because the cars’ production will soon move here; this falls under the investment spending category rather than the imports category. The added equation in the blog post is helpful to further the understanding of how since Chrysler cars will be manufactured in both the US and Mexico, it will increase and decrease our GDP.
ReplyDeleteChrysler moving the United States is a good for America's economy. I agree, but will it really create much of an impact if they are still being made in Mexico and America? It will be a good business move for Chrysler since the President is happy for the choice of business in America, and therefore bringing back jobs and building the economy for America. Also with the new taxes for businesses it will make the car dealership have an easier time making a successful business back in the United States.
ReplyDeleteI would agree that moving Chrysler to the United States is good for the nation’s GDP. As you said, our import costs would decrease and concurrently we would receive more direct benefits from the production (say, lower rates of unemployment). However, I feel as if there is some unspoken opportunity cost amongst this shift, especially given Trump’s tendency to stretch the truth--or avoid the truth altogether. Sure, it may be possible that Chrysler is moving for their own benefit, but even so, the switch may be costly. I’m looking forward to seeing how this change plays out, and how much of an boost it will have on our economy.
ReplyDeleteI agree with your stance that this will help the US GDP. By creating new factories to produce cars in the US, this will also help to lower the unemployment rate. However, I do feel there may be a negative effect on Mexico, as by moving parts of Chrysler production to the US, this will lead to unemployment in Mexico. In addition, this may hurt Mexico’s amount of sales.
ReplyDeleteI think that Chrysler moving some of their business back to the USA is a good thing as well. Although they are moving, however, some parts of the automotive business will not count for America’s GDP, since a large majority of the business will continue to stay in Mexico. I think that since some is over here now, it will make imports less and better.
ReplyDeleteSaying that it isn’t true that Chrysler is moving back to the US isn’t exactly true, car companies rarely have production of an entire car in one place. If you look at where other car companies are producing their parts, you will see that it’s all over the world, like how ford has engine plants overseas but the bodies and assembly is still in Dearborn Michigan, or how their performance vehicles like the F-150 Raptor and Focus RS are hand built in Germany, so it is almost unrealistic to expect a car company to move all of their production into one factory, as it is almost guaranteed that they will spread it out.
ReplyDeleteIt was extremely interesting to read that unemployment in the USA is at a record low. With Chrysler being moved back into the United States, I agree that there can be more jobs created and that certain aspects could be increasing America's GDP. Both of these statements like you mentioned are great for America, therefore it will be nice to see America's economy be more successful than ever!
ReplyDeleteI was actually watching Trump on TV last night and was actually surprised in some of the things he had mentioned. One being that the unemployment rate is at it's lowest in years and this counts for the unemployment rate for African Americans, Mexicans and etc. With Chrysler moving some of its production to the United States, it would allow for their new products produced to be counted towards the country's GDP. Although some of the Chrysler parts will be left over in Mexico it could/would be counted as imports instead of the GDP depending on the scenario.
ReplyDeleteI think that Chrysler moving to the U.S. had it's advantages and disadvantages looking at the economic standpoint. An advantage of this big company moving a portion of their production to The United States is it will open up more jobs here in America, which would obviously make the unemployment rate decrease if there are more jobs available for people that are looking for jobs. It would also increase the country's GDP with certain aspects or scenarios. However, there's a disadvantage of being more expensive to make the products here than it would be in Mexico. This country has a 4.1% unemployment rate and we learned that it's good to have the unemployment rate between four percent or six percent and moving some factories here could put this country below that range. In the end, everything should be kept the way it is until there is a further problem, because we already have an all-time low unemployment rate as well it cost cheaper to have the production of these products in Mexico.
ReplyDeleteWhile Chrysler moving some production to America might help the GDP, it won't make that much of a difference. The actual import cost from Mexico also takes away from the GDP. And who's to say foreign countries won't buy from still buy Chryslers from the Mexico production line? However, Chrysler moving some of their production to America isn't all a bad thing either. By producing Chryslers domestically, that money goes under investment spending, like you said.
ReplyDeleteChrysler moving some of its production back to the US is an interesting move. I am rather curious what prompted them to make that move. Be it pressure for Trump or some other favorable deal that was struck. The effects are obvious and I’m glad that the US will benefit from this move, I just hope that the cause of this move can be analyzed in order to determine how to make similarly beneficial actions happen more in the future.
ReplyDeleteI think Chrysler moving back to the U.S. is good for the economy. They are also keeping some of their production in Mexico. This helping the U.S.because of the GDP. This a good thing for the U.S. Wouldn’t it be better if they moved all productions to the U.S.?
ReplyDeleteYes I agree with you that Chrysler moving back to the US is a very good thing. Not only will it increase our GDP, but hopefully they will succeed in the US, causing other companies to possibly follow them. Although it is a very good thing Chrysler is moving back, it is only one company. If our economy can continue to get better and more large production companies move their operations back to the US, our GDP will increase even more, leading to many good possibilities for the future of our country. I believe that companies coming back to the US is one of the best things for our economy, because not only will our GDP increase, but our unemployment will decrease while our quality of living increases.
ReplyDeleteI also agree that moving Chrysler back to America will be good for the GDP. Along with moving Chrysler comes with new jobs causing the unemployment rate to decrease which is always a plus. Not to mention that with another major company like Chrysler coming back to the states, it will make our economy better by creating more money for workers, causing a surge in consumer spending. Although the company isn’t entirely moving to the US like Trump had said, it still shows that we are making a step in the right direction.
ReplyDeleteThis post relates both to micro and macroeconomics, Chrysler moving back to America will be very helpful to our country's GDP and the unemployment rate, therefore causing a demand for jobs and more competition in the car industry. Hopefully this move will be beneficial to our economy and continue to lower the unemployment rate.
ReplyDeleteI am all for business creating jobs in America. I think Chrysler moving a minority of their company back to america would be good for GDP but I also think that it won't have a huge effect. Chrysler is a pretty good size company and can really make a big splash and benefit America if it would produce here. The problem is all they car about is the bottom line and if they can make more money producing in Mexico that is what they are going to do. I mean that's what I would do everyone wants to make more money.
ReplyDeleteI think that Chrysler's move back to America for some production will be beneficial to our country's GDP. While it may not have a huge impact alone, if every company were to take a small step in the right direction and add some of their production back to the U.S, the synergistic effect could be huge and boast the U.S economy even higher.
ReplyDeleteI believe that any major brand moving to the United States is a great thing. Especially when it comes to our GDP. It might not have the biggest impact on our economy but it does point America in a better direction. Definitely not something we should brag about especially our president who finds anything positive and exploits it instead of focusing on the things America really needs to work on.
ReplyDeleteI think that Chrysler moving back to America will benefit the USA's GDP, but not by much, considering they aren't moving massive amounts of production back over here as overseas cost of production is still a lot lower than over here. I'd think they'd did to relocate substantial amounts of production back to the US in order to have a noticeable effect. Overall it is great they are moving back over here and they'll add a bit to the GDP but nothing to big, as the majority of Chrysler's is till overseas.
ReplyDeleteAndrew Retherford
DeleteI think Chrysler moving to America will help our economy and help Trump fulfill his promises, there has been a constant push for more jobs throughout the US, especially factory jobs that don't require much education. Moving to the US not only will decrease the deficit on imports, but also increase the GDP in production in America.
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