U.S. Gives German Auto Industry Zero-tariff Proposal, Merkel Receptive

Matt Posky
by Matt Posky
u s gives german auto industry zero tariff proposal merkel receptive

The fresh threat of new automotive and parts tariffs from the United States has everyone up in arms. We recently published an exhaustive list of comments manufacturers and local governments made to the U.S. Commerce Department. They, along with suppliers, universally despise the idea and are doing everything in their power to convince the Trump administration to reconsider. Many are even discussing the grim prospect of layoffs and suspending investments.

However, the president remained firm on doing whatever it takes to bolster domestic production and U.S. automotive exports while the world tried to make sense of his strategy. Was this a madman playing hardball and gambling with the industry’s future, or the work of a master dealmaker forcing others to come to the table? Perhaps a little of both?

Earlier this week, the U.S. ambassador to Germany told German car executives that President Donald Trump would suspend threats to impose tariffs on cars imported from the European Union if the European Union lifts duties on U.S. cars. But the wildest part of all of this is that both the automakers and the German government seem to be in support of it.

According to Handelsblatt, Ambassador Richard Grenell told executives from Daimler, Volkswagen, and BMW during a secret meeting on Wednesday that Trump wanted the EU to eliminate duties on U.S. cars imported to the bloc. In exchange, America would suspend plans to impose new tariffs on European-made vehicles and parts.

Currently, the United States imposes a 2.5 percent tariff on European cars and a 25 percent tariff on light trucks, while the the EU has a 10 percent tariff on imported American cars. German automakers began pushing for a zero-tariff deal after news of the tariff threat circulated.

On Thursday, German Chancellor Angela Merkel addressed the issue by saying she would support lowering European Union tariffs on U.S. car imports. “When we want to negotiate tariffs, on cars for example, we need a common European position and we are still working on it,” Merkel said. “I would be ready to support negotiations on reducing tariffs, but we would not be able to do this only with the U.S.”

Automotive News is already reporting that Verband der Automobilindustrie (VDA), which represents Germany’s car manufacturers, is stoked over the notion of lowered trade barriers. “But it is clear that the negotiations are exclusively being held at a political level,” the group included in its statement.

[Image: BMW]

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  • Art Vandelay Art Vandelay on Jul 05, 2018

    So many people...so much bullSheite

    • Rushn Rushn on Jul 09, 2018

      Aren't you the guy that starts cussing at the first signs of logic? :)

  • WildcatMatt WildcatMatt on Jul 20, 2018

    Here are the two facts to refer to when weighing this news: 1) Trump says he wants unilateral deals. 2) Merkel may be receptive but can't act unilaterally per EU rules. Even if the EU agreed to it, Trump might still reject it because it would be multilateral. This is Kabuki theater no matter how it plays out.

  • Lou_BC "They are the worst kind of partisan - the kind that loves their team more than they want to know the truth."Ummm...yeah....Kinda like birtherism, 2020 election stolen, vast voter fraud, he can have top secret documents at Mar-lago, he's a savvy business man, and hundreds more.
  • FreedMike This article fails to mention that Toyota is also investing heavily in solid state battery tech - which would solve a lot of inherent EV problems - and plans to deploy it soon. https://insideevs.com/news/598046/toyota-global-leader-solid-state-batery-patents/Of course, Toyota being Toyota, it will use the tech in hybrids first, which is smart - that will give them the chance to iron out the wrinkles, so to speak. But having said that, I’m with Toyota here - I’m not sold on an all EV future happening anytime soon. But clearly the market share for these vehicles has nowhere to go but up; how far up depends mainly on charging availability. And whether Toyota’s competitors are all in is debatable. Plenty of bet-hedging is going on among makers in the North American market.
  • Jeff S I am not against EVs but I completely understand Toyota's position. As for Greenpeace putting Toyota at the bottom of their environmental list is more drama. A good hybrid uses less gas, is cleaner than most other ICE, and is more affordable than most EVs. Prius has proven longevity and low maintenance cost. Having had a hybrid Maverick since April and averaging 40 to 50 mpg in city driving it has been smooth driving and very economical. Ford also has very good hybrids and some of the earlier Escapes are still going strong at 300k miles. The only thing I would have liked in my hybrid Maverick would be a plug in but it didn't come with it. If Toyota made a plug in hybrid compact pickup like the Maverick it would sell well. I would consider an EV in the future but price, battery technology, and infrastructure has to advance and improve. I don't buy a vehicle based on the recommendation of Greenpeace, as a status symbol, or peer pressure. I buy a vehicle on what best needs my needs and that I actually like.
  • Mobes Kind of a weird thing that probably only bothers me, but when you see someone driving a car with ball joints clearly about to fail. I really don't want to be around a car with massive negative camber that's not intentional.
  • Jeff S How reliable are Audi? Seems the Mazda, CRV, and Rav4 in the higher trim would not only be a better value but would be more reliable in the long term. Interior wise and the overall package the Mazda would be the best choice.