As part of a new free trade agreement due to be signed with the European Union, Canada will remove its 6.1 percent tariff on imported vehicles from the European Union, while the EU will remove its 10 percent duties on autos and and its 4.5 percent duty on parts.
American carmakers cast worried glances on Senators and union groups that want to create a level playing field with China. Senators Debbie Stabenow and Sherrod Brown, alongside union representatives and the labor-backed Economic Policy Institute try to push “the administration to bring a possible case at the World Trade Organization or begin a U.S. Commerce Department investigation that could lead to duties on Chinese-made auto parts,” as Reuters reports.
A study by the EPI alleges that the Chinese auto parts industry has received $27.5 billion in government subsidies since 2001. The study forgets that large parts of the U.S. auto industry would not be here anymore, would it not have been bailed-out by the U.S. government.
Why are carmakers horrified by the surely well-meant suggestion? Several reasons: (Read More…)