By on November 16, 2018

It’s been a trade-heavy week. Earlier, the White House decided to postpone any major tariff decisions following a discussion with the Commerce Department over a draft report on the impact of auto imports, giving trade representatives from the United States and European Union room to talk.

Unfortunately, things don’t appear to have gone swimmingly. European Trade Commissioner Cecilia Malmström left her Wednesday meeting with U.S. Trade Representative Robert Lighthizer promising that the EU would have retaliatory tariffs at the ready if America pulls the trigger on auto import duties. However, she also said some progress was made during her talk with Lighthizer, but had nothing conclusive to announce

Negotiating with the EU has grown difficult and, frankly, the automotive aspects have become less important of late. The European Union is now discussing the possibility of creating its own army, leaving president Trump to tweet angrily about historical precedents. 

“Emmanuel Macron suggests building its own army to protect Europe against the U.S., China and Russia,” Trump wrote earlier this week. “But it was Germany in World Wars One & Two — How did that work out for France? They were starting to learn German in Paris before the U.S. came along. Pay for NATO or not!”

While German expansionism was indeed a major theme of the 20th century, the leadership of France and Germany are both open to the idea of building an army this time around. Take away from that what you will — just know that it’s creating additional tensions that aren’t likely to simplify trade negotiations. Nigel Farage, a British Member of the European Parliament and leading advocate for Brexit, is currently trying to encourage free trade deal between the UK and the rest of Europe, without much success. He also recently claimed the EU’s recent actions have “launched a new Cold War against America.”

Long story short, relations between the EU and U.S. aren’t particularly good.

It’s too difficult to pin down exactly when things started going sour, but the United States’ steel and aluminum tariffs were an important milestone in 2018. The EU responded immediately with new duties on American products like jeans, bourbon, and motorcycles. In June, the countries agreed not to impose any new tariffs on each other as they worked toward a free-trade solution. That sounds good, and it’s been endorsed by several of Europe’s leading politicians, but all that’s really come of it is a standoff hung upon a loose agreement.

Malmström said Wednesday she doesn’t expect any new tariffs coming from either side, but also claimed the EU has “not received any assurances” that the Trump administration won’t still implement auto tariffs. Presumably, Trump’s summer meeting with Jean-Claude Juncker, President of the European Commission, didn’t hold sufficient weight, as no formal agreement was penned.

However, in August Malmström said the European bloc would be willing to remove all tariffs on cars and other industrial products as part of a limited trade deal with the United States, if the United States does the same. Perhaps this problem can still be solved in a way that’s beneficial to all parties if everyone keeps that suggestion in mind. But we’ve noted before that the clock is ticking and the United States appears less interested in waiting around.

Last month, U.S. Commerce Secretary Wilbur Ross said as much following a meeting in Brussels. He complained that the EU needed to show things were progressing and mentioned that the two nations really only have until the spring to hammer out a trade deal before the U.S. has to make a final decision on tariffs. Unfortunately, the U.S. is supposed to wait until 2019 before it can consider trade debates official. As well, the EU has to gain approval from 28 member states. It’s a lot to ask for on a very limited timeline.

“It could be cars, it could be agriculture, it could be industrial products — it could be everything. And we will do that, but hope we don’t have to get to that situation,” Malmström said of the EU’s potential tariffs.

It looks like we’ll either end up with a more fluid automotive exchange with Europe in 2019, likely abolishing all tariffs, or a situation where we tariff each other into oblivion and vehicle prices rise just about everywhere.

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64 Comments on “Europe Will Punch Back Against Any U.S. Car Tariff: EU Trade Commissioner...”


  • avatar
    DearS

    Europe has 10% tax on everything
    We have 25% on trucks
    Neither wants a change, we could build here and there and vise versa.

    What we think is fair they might not see that way. Both sides want to protect their industry (generally).

    • 0 avatar
      brn

      Yep. Both sides are stubborn. It’s silly that no administration in recent history, on either side, has been able to work this out.

      It’s almost as if there’s something else going on…

      • 0 avatar
        highdesertcat

        Each side is trying to protect its own turf and its own interests.

        Trade should be fair and equitable for all involved, so I say, let’s slap reciprocal tariffs on everything until both sides see the error of their ways.

        That said, I sure enjoyed buying things tax/duty-free while stationed in Europe with the US military.

        • 0 avatar
          Big Al from Oz

          HDC,
          “Fair and equitable”, is a very vague expression. So, what and how do we measure “fair and equitable”?

          Flowery feel good language, with little meaning.

          • 0 avatar
            highdesertcat

            It is measured by how all the parties involved feel about the trade-relationship.

            As long as one party feels disadvantaged, the arrangement is not fair and equitable.

            So, the parties sit down and cuss and discuss to attempt to reach an agreement that all can live with.

            Sometimes that doesn’t happen. More often than not, it does happen, as in the USMCA.

        • 0 avatar
          formula m

          Desertpussy is high on dirty donny’s Kool-aid. They cheer on Trump to be the turd in the punch bowl of world politics

          • 0 avatar
            brn

            fm, when your entire argument is based on name calling and put downs, it only makes one person look bad.

          • 0 avatar
            Lou_BC

            It sounds like USMCA will not clear congress. Even Republicans don’t like it.

            Killing NAFTA or TPP just because someone else that you don’t like signed off on it isn’t sound foreign policy.

        • 0 avatar
          DearS

          – Someone will always be a disadvantage in some way as neither will ever sell the same number of cars to the other.

          • 0 avatar
            highdesertcat

            DearS, what is at issue is the taxes, levies and tariffs the trading partners place on American-made goods before they can be sold in their countries.

            What I am saying is, let America place taxes, levies and tariffs on the goods we import from those countries.

            I like what President Trump has done. It has done wonders for the US Steel and Aluminum industry as well as the mining and energy sectors of the US.

            I like it. I love it. I want a lot more of it.

  • avatar
    Fred

    Odd that this would especially hurt folks like BMW who build cars here and export to Europe. Which a quick search says is $10 billion a year.

    • 0 avatar
      Big Al from Oz

      Fred,
      I posted a link and cut and paste yesterday about BMW moving production out of it’s US plant in NC and to China, because of Trump’s trade war. Jobs lost.

      • 0 avatar
        Lorenzo

        For BMW, that’s an out-of-the-frying-pan-into-the-fire move. Bulding in China and shipping to Europe may work, but shipping to America is likely going to be more expensive.

        Either way, Europe lost the jobs that formerly existed in Germany. You have to ask why was BMW building here and shipping to Europe in the first place? Isn’t Mercedes and Volkswagen doing the same, for certain models?

        The zero car tax idea came from Germany, who would be most hurt by tariffs. Any “comprehensive” trade agreement will affect non-auto products of the other European states, and they’re the ones making the negotiations difficult.

        The key line in the article, that “the two nations really only have until the spring” is grossly inaccurate. The European Union is not yet a “nation”, and may never be, and that’s the crux of the problem.

        • 0 avatar
          Big Al from Oz

          Lorenzo,
          Money. Why build in the US and export to China with a new 40% tax, due to Trump Trade Tirade?

          The US is also proving unreliable as a country to invest billions into.

          Why build large BMWs in the EU where most of the current large US built vehicles are not suited to the EU market?

          The EU will still produce the BMWs that are suited to it’s market and export whatever they can around the world, including the US.

          This is where the Big 3 have failed globally.

          Why not produce in an expanding market for the future?

          BMW and most other global players do well in most any country. Why?

  • avatar
    jacob_coulter

    I still say it’s stupid to try and win a trade war with the US when the US has almost nothing to lose. I’m sure Americans are quaking in their boots that blue jeans and bourbon may see a tax increase in Europe. Do they even make jeans in the US anymore? I thought Levis left decades ago.

    Auto industry leaders in Europe are basically saying to just a cut a deal as the American market is way too important to lose out on.

    It’s amusing that “trade war” now means the US shouldn’t try and get trade deals with less tariffs on both sides. I thought that was what “free trade” was all about? Or was the actual goal to just make it as lopsided as possible against the US because America owes the world our markets?

    • 0 avatar
      Lockstops

      Well, it’s just that Trump is bad, mmmkay? See how Cecilia is bravely fighting against that bad white man, mmmkay? Vote for Cecilia, she works for good against bad, mmmmkay?

    • 0 avatar
      Snooder

      “The US has nothing to lose”

      Lol, wut? I don’t know about you, but i have a job. A fairly decent one, although i’m hopeful for some career advancement. And i would really prefer not to have that job disappear in another global recession. I was lucky enough to graduate just AFTER Obama pulled us out of the last one and the prospect of spending months unemployed like people i know did then, is really not something i’m looking forward to.

      • 0 avatar
        jacob_coulter

        I’m old enough to remember when Democrats also railed against unfair trade deals.

        But ever since Trump actually did what Democrats kept promising to due paying union members, these same Democrats suddenly sound like the Cato Institute and wax poetic about free trade globalism.

    • 0 avatar
      Big Al from Oz

      Jacob,
      The US will lose out. The combined economies China, the EU and Asia is 2.5 times the size of the US. Whilst the US is busy isolating itself there has been a raft of FTAs completed recently to sure up international trade and reduce the fallout of US isolationalism.

  • avatar
    Oberkanone

    25% tariff on imported light trucks from EU since 1964. EU has failed to “punch back”. Clearly an empty threat by EU.

    • 0 avatar
      highdesertcat

      Right! And this should not be seen as a win or lose proposition for either side. It should be viewed as a correction to the trade imbalance that has existed since the end of WWII.

      Thus, President Trump levies a tariff or tax on stuff imported into the US and the trade partners do the same on their side, and then President Trump raises the ante, and so forth.

      At some point when these punches and counterpunches begin to affect sales of imported goods, an equilibrium will be reached.

      I’m all for it! Why should the US have to suck hind t!t and be disadvantaged in a trade agreement like the US had been at a disadvantage since the end of WWII?

      I say tariff the hell out of anyone not willing to play ball. The US doesn’t need them. There will always be someone else to fill the void.

      • 0 avatar
        Snooder

        I’m sorry, but are you trolling or actually dumb enough to believe that the US has been on the wrong side of a trade imbalance since WWII? World war II. Which ended in the 40s and the ending of which brough us out of the Great Depression and into the largest economic boom for the US ever. Where literally every other developed country for all intents and purposes no longer had manufacturing infrastructure.

        I honestly can’t tell any more.

        • 0 avatar
          highdesertcat

          Obviously, the trade imbalances that have existed since the implementation of the Marshall Plan after WWII are being addressed by the current US administration. And corrected.

          MORE change is coming. It started with the USMCA and new bi-lateral trade agreements with other trading partners.

          Americans who pay taxes, like myself, are sick and tired of underwriting the rest of the planet through subsidizing NATO and acting as a sponge for foreign-made goods while at the same time finding American-made goods taxed and tariffed when exported to other trading partners.

          Your attitude of self-acclaimed intellectual superiority calling others dumb says a great deal about you.

          I didn’t vote for Candidate Trump, but I sure am glad that he turned out as President the way he did. It has been GREAT for me and mine, and even better for all Americans interested in bettering themselves. Low unemployment, lower number of welfare and foodstamp recipients. What’s not to like?

          What really won me over to President Trump was that he made outrageous promises on the campaign trail that no one took seriously. Yet, he kept those promises.

          Promises made, promises kept!

          First President in MY 72 years on this planet to do so.

          • 0 avatar
            King of Eldorado

            “Promises made, promises kept!”

            Sorry, not even close to being true. “Something terrific” to replace Obamacare? Nope. A plan to quickly defeat ISIS? Order the generals to come up with a plan, then keep doing what Obama did. Build a wall at Mexico’s expense? Nope. Protect the Dreamers/DACA? Nope. Middle class tax cut? OK, maybe enough to pay for Costco membership while the rich get millions. Booming economy? Thanks Obama! Low unemployment? Ditto. Replace NAFTA? Tweak NAFTA a little then claim it’s all-new. Fix unfair trade? Impose harsh tariffs that not only encourage retaliation but hurt specific industries (soybean farming, Harley-Davidson, automakers (e.g. Ford) that rely on imported steel and aluminum,…). And on and on. Essentially NOTHING has been accomplished.

            OK, back on topic: For truly burdensome tariffs — e.g., Canada’s on dairy products from the US — target them individually and sit down with foreign counterparts to negotiate. Surely something can be worked out as between the Chicken Tax on trucks and Europe’s 10% tariff on all vehicles from the US? Also, read up on the Smoot-Hawley fiasco.

          • 0 avatar
            highdesertcat

            King of Eldorado, granted, it didn’t work for everyone.

            But it sure worked for me and mine, and I dare say, for many other American citizens as well. In MY area, we don’t have enough labor to do all the work that needs done.

            That’s what makes these turbulent political times so interesting to an Independent like myself.

            The last guy in office didn’t work well for me at all and no one on your side cared.

            So I look at President Trump as having MY interests at heart and those on MY side don’t care about the opinions of your side.

            It’s all about what works, and what doesn’t, that drives people to the polls.

            In two years or so, we’ll see if President Trump gets re-elected, or not.

            I didn’t vote for him in 2016 but I sure as hell will vote for him in 2020. I am enjoying the best years of my life, financial and all-around. Why would I vote to go back to the welfare and depressing ways of the ‘crats.

            No thanks.

    • 0 avatar
      DenverMike

      Actually they did punch back with a Chicken tax of their own. 22.5% against US/import pickups/cargo vans.

      Otherwise Europe would have a taste of F-150s along side the Mustang.

      • 0 avatar
        Ce he sin

        I’m intrigued by this reference to the Ford F150.

        If I go down to my friendly Ford dealer they’ll offer to sell me a Ranger. They’ve got nothing called an F150 and never have.

        You know the reason of course. These evil Yurropeans impose cruel 10% tariffs on US built vehicles so the F150 would be affected by these while the Thai built Ranger would only be affected by the 10% tariff set out by the WTO….oh, wait. They would be treated exactly the same. Surprising, that.

        Anyway, how would you propose that the F150 could be sold in place of the slightly smaller Ranger? Clue: the F150 is built in high cost America. The Ranger is built in low cost Thailand. You’d want to reduce the production cost of the F150 to a level which would allow it to be sold instead of or alongside the Ranger. So, where would you build the F150 if you wanted it sold in more markets?

        • 0 avatar
          Big Al from Oz

          Ce he sin,
          DiM is greatly overstating the 22% tax on pickup/commercial vehicle imports into the EU.

          I visit the EU on a yearly basis and noticed there are mainly dual cab and extended cab pickups.

          Why?

          They attract only a 10% tax. This is due to an obscure EU tax ruling. If the bed of a pickup (load/bed area) is less than 50% of the wheelbase of the vehicle, then it’s considered a passenger vehicle.

          What’s odd is if the EU has some Asian pickup imports (Hilux) and they are selling with a 10% tax, why does US vehicles struggle in the EU market.

          Why are F Series, Silverado/Sierra and Rams not selling?

          Or for that matter US midsizers?

          Maybe they are not competitive.

        • 0 avatar
          DenverMike

          You don’t think it’s a trade barrier, needing to build the F-150 in Thailand for it to be profitable selling in Europe? You don’t think Euro protectionism is accomplishing exactly what it was designed to do? You don’t think the US has been too lenient to imports while US automaker’s autos including many by Toyota, Nissan, Honda, etc, are basically banned from Europe?

          Shouldn’t it be as cheap and easy for US automakers wanting to sell in Europe, as it is for European cars selling in the US?

          You don’t see the one-way street? Historically when the rules were set in stone, the typical F-150 had an 8 ft bed and regular cab, obviously subject to the full 22.5% Euro tax, just to get things started, same as US cargo vans now.

          If all this seems fair to you, say no more..

          • 0 avatar
            Big Al from Oz

            DumberMike,
            Ford is building pickups (Ranger) that sell in the EU … in Thailand. But the EU market is not a pickup market, so few are sold. So if few Rangers sell an F Series will not.

            American vehicles are expensive and ill fitting for the EU.

            How effing hard is it?

            Build competitive vehicles that sell in multiple markets, like the rest of the world does.

    • 0 avatar
      Big Al from Oz

      Oberkanone,
      Um, didn’t the EU offer only a 6 months ago to remove all tariffs on US vehicle imports into the EU as Trump had requested?

      So, Trump backed down after Detroit whined and lobbied that the US will lose out with free trade between the two trading blocs.

      I think you need to read and research a little more.

  • avatar
    stingray65

    This is complicated. The EU charges a 10% import tax on non-EU manufactured cars, which I believe is taxed on the car value + shipping cost. Then individual EU countries often add taxes based on CO2 emissions, engine displacement, vehicle weight, etc. and then charge up to 26% VAT on top. This means a $39,000 Mustang + $1,000 in shipping costs, becomes $44,000 with the 10% import tax. Then the $44,000 Mustang might get $10,000 added on top in various CO2 taxes, and then 26% VAT calculated on the $54,000 Mustang – which is how a $39,000 Mustang becomes a $67,000 Mustang. Then the EU Mustang owner gets to pay $6 to $10 per gallon for gasoline (of which $4 to $6 is tax), which is why almost no one drives a Mustang and everyone drives a diesel or 1.4 liter gasoline Golf (or equivalent). Thus a truly level playing field would require Europe to eliminate their import tax, CO2/displacement/weight taxes, and drastically lower their VAT (sales) tax and fuel taxes, which ain’t going to happen because the welfare state needs every penny they can suck out of car owners.

    • 0 avatar
      WalterRohrl

      I think you are somehow overlooking a few things. If that Mustang was for example a BMW built in Germany, it would ALSO get charged the same VAT and the same CO2 taxes, whatever those are (you mean the registration fees based on consumption/emissions, displacement, and possibly weight?) If you don’t really know then please don’t “suppose”) Gasoline costs the same irrespective of the car so that’s a complete canard, build something that’s not a gas guzzler and maybe people would be more willing to buy it. The same thing happens over here when gas prices go up or down but I know you are aware of this.

      BMW (to continue the random example) builds plenty of vehicles just as inefficient and more expensive than that Mustang, all of which are available (and sell) across Europe.

      You make it sound like the VAT and CO2 tax would only be on imported cars from the US when that is not the case, the Mustang is NOT subject to an additional $28k that a native born car would avoid. The only difference is the 10% import tariff and then the incrementally larger tax possibly caused by that extra 10% tariff. So hardly a huge deal in the grand scheme of things.

      It’s not the Euros fault that the US can’t seem to (or doesn’t want to) build a competitive car at a competitive price that conforms to what a “diesel or 1.4 liter gasoline Golf” represents.

      Perhaps you could please point out exactly what extra costs a Mustang might incur that an equivalently powered, sized, and prices BMW would not be charged while leaving out the charges that BOTH are subject to.
      That’s your true difference.

      A true level playing field would need to start with the Americans actually building cars that are similar to what actually sells over there, pricing it competitively to start, and then maybe people can complain about a 10% tariff. Actually make that a 7.5% tariff DIFFERENCE relative to our 2.5% tariff if we overlook the reverse disparity (10% vs our 25%) that affects trucks and vans potentially coming the other way.

      • 0 avatar
        Big Al from Oz

        WalterRohl,
        TTAC unfortunately has attracted what appears to be 14 or 15 year olds who listen to their disgruntled fathers. No one can make the statements some of these guys do with all the data and information on the net this day and age.

    • 0 avatar
      Lockstops

      Stingray65: You are right otherwise, but there’s even more: The EU also charges VAT on the 10% import tax (since EU products of course don’t have the 10% import tax, this VAT is something that only imported products are charged).

      So the $39,000 Mustang + $1000 shipping costs is taxed 10% = $4000 plus VAT on that $4000 which for 26% VAT is $1040. So the import taxes amount to $5040, not $4000.

      Then the VAT and all ‘eco taxes’ are calculated and added on to the price. They are calculated from the sales price including the import taxes, so since the import taxes raise the price well above EU-market products and then there are large taxes calculated from that, the difference actually INCREASES even after the import taxes are slapped on. If the EU product is for sale at $39,000 and the US product is elevated to $45040, then for example a 15% ‘CO2-tax’ or whatever would be $5850 for the EU product and $6756 for the US product. That’s another $906 to add to the $5040. And a 15% tax would be a puny percentage in many EU countries, it’s not uncommon to have 30% taxes slapped on the cars, which increases the aforementioned effect.

    • 0 avatar
      brn

      I think stingray pretty much nailed it (lockstops added more math). The “net” markup is insane, a lot higher than the 10% that is claimed. Effectively massively higher than the chicken tax that everyone loves to b*tch about.

      The playing field is far from level.

    • 0 avatar
      Arco

      I lived all my life in europe. But I have also spent a fair time in the US.

      American cars does not sell in europe because most of them don’t make sense here, it has nothing to do with tariffs. For instance fullsize trucks like the F-150 the best selling auto in the US is not suited for narrow european roads parkinglots high fuelprices and general livestyle and taste. Americans should stop whining and make what the worldmarket wants or simply shut up.

      The needs and taste of most of the world is different than in the US. Stop being ignorant.

      American products that are suited for other markets taste and needs do sell in large numbers worldwide and are often considered top notch such as as the iphones tesla cars boeing airplanes. There is no general animosty against us-made regardless of what you president implies.

      Make the best or at least a good product and it will sell. Japanese automakers also didn’t succed in the US until they started making what americans want. The tundra and accord are not/hardly sold back home in japan. 10% tax does nothing when the product is undisirable in europe regardless.

    • 0 avatar
      Big Al from Oz

      stringray65,
      What half baked BS.

      Show me the maths. I do believe Walter’s response is far more accurate than you input.

      So, does US State taxes act as import barriers? Why not force the States to remove their import taxes on EU produced vehicles? Because what you stated is nonsensical.

    • 0 avatar
      MeaMaximaCulpa

      That statement isn’t even in the ballpark of understanding economics. All taxes down stream from the import duty (levied on the price of the car plus shipping) is exactly the same regardless if the car is made in Europe or the US. The influence of the tarrifs from the perspective of European consumers are the tarrifs and the tarrifs alone.

      The problem for the US producers are different tastes in cars and car sizes, the US domestics having produced mostly crap from around 1970 to about 2000, the US having implemented standard that doesn’t line up with global standards making economics of scale hard or impossible to achieve and US manufacturers obviously pricing their product higher in Europe than in the US. Cadillac could probably move sedans in Europe if GM wasn’t stuck on believing that Cadillac is a true Mercedes competitor, something Cadillac is pretty far from being viewed as, and dropped ithe prices. Heck, the Japanese and the Koreans manages to move some pretty expensive cars in Europe so the US should as well provided that an actual effort was made.

      Also, the average tarrif on US gods in Europe is still below 3 % and that figure is faaaar more important than the 2.5 %, 10 % and 25 % figures thrown around as trade deals are way bigger deals than just looking at a single product.

      FYI
      A base Mustang ecobost – that does include some features not included in the US base price but excluding others – excluding all tariffs and sales taxes in Sweden is around $ 31-32 k BUT including destination and delivery as well as dock fees, the tarrif rises the price to about $ 35 k before VAT and around $ 44 k with VAT and that includes destination, delivery and doc.fees as prices always is the price out of the door. A Mustang ecoboost with destination/delivery charges is around $ 28 k in the US before sales taxes and document fees. Obviously the delivery in the continental US will be far cheaper for Ford than shipping it across the Atlantic to a minuscule market in Northern Europe explaining maybe $ 1 k in price difference still leaving a price difference of about $ 2 k. Some of that is the added cost of another added layer of admiration (European and national Ford). Still, Ford probably makes more money on a Mustang sold in Sweden as opposed to one sold in the US and the fact that the US has it own standard for automobiles that diverges from the global standard in the rest of the industrialised world and that Ford has to hedge against exchange rate fluctuations. Anyways the price increase due to tariffs compared to the US SHOULD be around $ 3 k.

      The Mustang could have sold in much larger numbers but Ford seems to have limited supplies in Europe – at the same time people where paying above MSPR in Europe there was excess production capacity- probably to keep transaction prices high. Ithis had some nice side effects, you could at one time buy a new Mustang GT, drive it for a year and then sell it for the same amount you bought it for. Ford also limits the number of dealers allowed to sell Mustangs to a handful in many European countries.

  • avatar

    The whole idea behind the tariff threats is to get US trading partners to agree to drop duties currently imposed on American-made goods.

    The threat of tariffs must be there if there’s to be any chance of arriving at a solution more favorable to the US.

  • avatar
    Big Al from Oz

    It’s a real pity we have some of those who use their colons as voice boxes (the Trumpettes).

    The EU made a great deal, the one that Trump wanted, no tariffs of motor vehicles from either side of the Atlantic.

    Also, the EU allow US design regulated vehicles on their roads. The US can reciprocate and allow UNECC regulated vehicles on it’s road while we are at it.

    The EU only has a 10% import tariff on US cars. The US has a 2.5% tariff of EU cars. If my maths is correct this equals 7.5% difference.

    But this difference isn’t why many US vehicles are not sold in the EU. US vehicles don’t attract the average EU consumer. So, why not build vehicles to attract the EU consumer for starters?

    EU vehicles are attractive in the US, better fit and finish and quality and the pricing is competitive.

    Ford and GM can’t make ends meet in the EU. Maybe just maybe the US Big 3 need to start looking at why they are not competitive globally in markets where they don’t have this ‘perceived’ handicap that some of the uber rightwingers here whine about. Why does US manufacturers struggle in the same markets as other competitors?

    The only reason the Big 3 don’t struggle in the US is because of large pickups and the pickup derived station wagons. Why are they as popular as they are ………. the chicken tax!

    • 0 avatar
      DenverMike

      “…the EU only has a 10%…”

      @BAFO – Are you stupid? That’s just the beginning. And EU technical barriers kill the deal even more.

      And you have ignore the fact the US is the only meaningful market on Earth that allows either Right Hand Drive or LHD, amber or red tail-turn signals. etc.

      The US and it’s regulations/tariffs are the most welcoming to import automakers of any market with a huge domestic based/originated auto manufacturing, so much that import brands have taken over the US market decades ago.

      Large SUVs and big Pickups when allowed to roam free, not taxed to high hell, and or stupid high fuel (corruption), will thrive any 1st world market, no Chicken tax necessary.

      There’s only one catch… US Lemon Laws. Otherwise, yeah we’d have all sorts of Chinese crap, Indian pickups and become a dumping ground for other junk, including Peugeot, Citroen, Lada, Tata, etc.

      Over all, Large SUVs and big Pickups are a small part of the US market, but obviously generate the most revenue of any segment. You say they’re “protected”, but can never say which global vehicles they’re protected from….just pure taking out of your… or are you as stupid?

      • 0 avatar
        MeaMaximaCulpa

        Ah, good old ‘murican talk!

        Your claim doesn’t compute with reality. The EU technical barriers are a domestic American product as the US has opted for rules diverging from global standards. FYI in any European country you can drive a car with the steering wheel in the left or on the right or in the center of the car if you so choose. One might also wonder if the allowance of LHD/RHD drive is really meaningful in the US as pretty few cars with the steering wheel on the right side of the car tends to be federalised. You know, the EU being around half a billion consumers should probably qualify as a meaningful market. The red turn signals iare obviously stupid and you’re right that only the US allows them, on the other hand an amber turn signal that’s approved in Japan is also approved in the EU, and Australia and loads of other places but not the US. A headlight aproved for use in Europe is also aproved for US in basically every industrialized country on earth except the US provided that it’s manufactured for driving on the same side of the road. So the technical barriers seems to be a US exclusive thing and not the other way around. The “etc” is in reality just a full stop; well the US does allow cars without rear fog lights and backup lamps, something that the rest of the industrialised world requires; on the other hand the US does require side marker lights so maybe it evens out.

        Import brands has taken over the US domestic market, a lot of those cars are built in the US bit of course you right, BOF trucks and SUVs are the only segments US manufacturers are competitive in. This might have something to do with the chicken tax or/and that the big 2.5 having built crap for 30 years. What’s so uniquely welcoming with a market that imposes it’s own standards, has a 25 % import duty on the most profitable segment of the market eludes me.

        Large SUVs and pickups might thrive when allowed to roam free – especially when fuel is taxed so low that you can’t afford to maintain the highway system and also ignoring all environmental costs – but this pretty much hinges on a country being to a large extent being sparsely populated, rural and/or suburban, built on plains and built around the idea of the car as the main mode of personal transportation. Large part of Europe doesn’t have the luxury of being a sparsely populated rural plain and is sadly hampered by pesky things like, mountains, rivers (that the US also has in spades but the ratio to plains is still waaay of), actual cities with history, architecture and roads centuries older than the US. Europe COULD opt to level Paris, Rome, London and Stockholm to the ground, demolish all train tracks, cancel all bus services and fill the subways with concrete but this has sadly been ruled out as cost ineffective. Strangely people living within shorter commutes and around larger cities with somewhat cramped streets has this idea that a Ford F450 might be a worse option than a Golf. But give as time for a pan continental punch up and the mighty pickup might become really popular..

        On the subject of US lemon laws I do presume that you’re familiar with the EU directives regarding consumer protection as well as all relevant national legislation and case law? Anyways let me assure you that an EU consumer has the option of returning a sub standard car bought from a dealer. Furthermore both Citroën and Peugeot has far higher quality scores than both Jeep and Tesla. Tata is sold in the US but like in Europe only the trucks as Tata stopped producing cars a couple of decades ago. You do have a point about Lada.

        In conclusion your statement has little, if any, basis in facts but seems firmly plante in American exceptionalism.

  • avatar
    Arco

    The US market is actually the one full of invisble barriers. Unique crash-test standards, Emission standards etc. The U.S. system requires a large deal of re-engineering, changes in body structure, different blinker systems etc. The cost of federalizing a car for the US market is huge and is a big reason why the numbers of models and variants offered in the US is often reduced. Other large markets such as europe and japan nowdays have harmonized much of the regulations, type approvals etc between them. EPA and DOT regulations are totally unique and non conforming to the regulations elswhere.

  • avatar
    vehic1

    A certain someone is quite incensed over having done so poorly in the recent elections – despite his almost nonstop farm-country rallies; hence the lashing out at reporters, election systems in Republican states, world leaders, trade, etc. Time will tell whether or not there will be any cooling down, or all fiery, vindictive anger – for the next 2 years.

    • 0 avatar
      highdesertcat

      He should be incensed.

      Things didn’t turn out as well for his policies as he had hoped they would. But they turned out better for him than the first mid-terms did for the last guy in office.

      That said, the next two years will continue to be tumultuous with SOPs being turned on their head. Lotsa changes coming’, across the board.

      The idea is to benefit and profit from those changes before the ‘crats take over Congress and the White House in the future, whenever that will be.

      For some people, me and mine included, the Trumpian effect has been great. And I didn’t even vote for the guy!

    • 0 avatar
      Big Al from Oz

      vehic1,
      Trump appeals to the short sighted ones who don’t research and believe the US is the fairest of them all.

      The US is not much different than most any OECD economy protecting it’s industry. This is very evident in the auto sector with “US unique vehicle design rules”, chicken tax protecting the Big 3’s geese that lay the golden egg.

      I think the US needs to realise it costs $hitloads to produce in the country and forcing other nations to buy a US product that is on par quality wise with the competition and more expensive is a bit rich.

      The US is good at technology,farming and advanced manufacturing. So, why not promote these industries? Why concentrate on appliance manufacturing industry. Is this because the US failed to educate its people for more advanced economy? Now there is a large group of disgruntled and ill eductated people unable to transition into a new economy and build a better America?

      Also, the US needs to look at it’s minimum wage and create a new line of middle class jobs. This will increase spending and accelerate growth over a longer and more sustainable period.

      • 0 avatar
        highdesertcat

        ” the US needs to look at it’s minimum wage”

        I strongly disagree with that. I think we need to look at much more automation.

        And I am thankful that is happening. I was in Scottsdale, AZ for an extended stay, and actually got to use one of those McDonald’s Kiosks to order my food. Ditto with other places we ate and shopped.

        It was GREAT! I loved it. And even better, no lousy service and NO TIPPING!

        It was what it was, is what it is, and will be what it will be. GREAT!

        I’d like to see much more automation on the production lines as well.

        Went to a Tortilla factory in Guadalupe/Tempe while there and the owner showed me his machines that make all the stuff. Ditto with a Krispy Kreme place he owned.

        Man, I loved it! No people. Just efficient machines being fed ingredients by a human or two. Human error much reduced. Verification built in. QC rules the day.

        • 0 avatar
          Big Al from Oz

          HDC,
          One of the issues confronting the US is the dwindling middle class and the especially the lower class, disparity is rife.

          The money is not moving south to the general populace it’s staying at the top.

          So, US policy on industrial relations (income), taxation and economic management needs restructuring to move money to the people.

          I’ll let you in on a secret. If 25% of the money held by the richest in the US moved to the real lower class and middle class you would see an explosion in economic activity.

          Why? Because the money would be spent on consumer products, ie, retail, cars, new homes, washing machines, better quality food and on and on.

          The US is world reknown for it’s poor treatment of the lower classes and disparity is rife.

          This will also allow more money to be spent on education in the lower and middle classes.

          This is one area that Australia has done well. We have and most all Australians believe that the minimum wage should be enough to live, not subsist.

          • 0 avatar
            highdesertcat

            You are describing societies in real-life. Inequities among the masses. The haves and have nots.

            What you desire is Communism where everyone is in the same class of poverty.

            I cannot buy into that one class fits all, everybody has the same level of poverty that you describe because I busted my ass for all the years I was self-employed in order to better the existence of me and mine.

            And it worked, for me.

            It’s not guaranteed to to work for everyone.

            You know, it is entirely possible to do everything right in life, and still come up snake eyes.

            (I gotta go. My sheet cakes I’m baking for church tomorrow are done and I have to frost them.)

          • 0 avatar
            Big Al from Oz

            HDC,
            Before you start off on how much taxation is paid etc look at the attached graph and you’ll see we are very similar in the amounts of tax we pay as the US. We spend less on welfare, because people don’t need it. The ones that get welfare is more targeted.

            So, to spend less on welfare, pay more to the people.

            https://www.forbes.com/sites/niallmccarthy/2017/11/29/the-countries-most-reliant-on-tax-revenue-infographic/#289e1a3f3180

        • 0 avatar
          Big Al from Oz

          The OECD report shows that a single Australian minimum wage worker with two kids could work just six hours per week to lift themselves above the poverty line, because they would also receive state benefits.
          In the U.S., the same worker would have to clock in 50 hours per week to escape poverty. In the Czech Republic, it would take 79 hours of work per week.

          https://money.cnn.com/2015/05/14/pf/minimum-wage-countries-australia/index.html

          HDC,
          You see, sometimes being overly selfish and worried that someone might have it easier than you makes you less fortunate.

  • avatar
    Big Al from Oz

    HDC,
    So, how good is the “US System” for the average Joe? Your first comment on this site was about fair and equitable and your comments don’t lead me to believe you are fair and equitable.

    Read below;

    Move over Davos. We might not feel it, but the typical Australian is richer than the typical person in any other country in the world, according to a survey.

    Australia has seized from Switzerland the global title of having the highest “median wealth per adult”, in Credit Suisse’s 2018 Global Wealth Report released on Friday.
    Not only are Australians relatively rich by global standards, our wealth is more evenly distributed across the population than many other countries, it finds.

    Wealth is defined in the report as the sum of all assets, including residential property, deposits, shares and super, minus all debts – a concept otherwise known as “net worth”.

    The results show that if every Australian adult lined up in a row, the middle person would have a net worth of $US191,453 – about $270,000 at Friday’s exchange rate.
    That puts us a nose ahead of the middle Swiss adult’s net worth of $US183,339.

    Switzerland retains, however, its dominance over the global ranking for average wealth per adult – which it has topped every year since the survey began in 2000. The net worth of the average Swiss adult is $US530,240. Australia comes in second place with an average wealth per adult of $US411,060 (almost $580,000).

    https://www.smh.com.au/business/the-economy/australians-overtake-swiss-to-lead-world-in-median-wealth-stakes-20181019-p50arv.html

    Fair an equitable is for all, not just you.

    • 0 avatar
      HotPotato

      “What you desire is communism” says HDC to BAFO. BAFO, the guy known on here mostly for lionizing a free market without subsidies and tariffs. As the kids these days say, I can’t even.

      • 0 avatar
        Big Al from Oz

        HotPotato,
        Australia and the Swiss are two of only six economies considered as free market.

        Lionising? I’m a staunch advocate of more open trade. The US has done very well in the past with opening up global markets.

      • 0 avatar
        Big Al from Oz

        Oh, my comment is not an insult to you. Maybe I should of opened with a thanks.

        Actually my current project at work is being closely knitted into leaning a complex and complicated enterprise arrangement with multiple stakeholders, all huge instutions in their own right. There are only five players on the team. Business architecture. My systems knowledge has helped greatly and I had to learn Visio insude out producing eye candy presentations. I’m loving it!

  • avatar
    vvk

    So much anti-American activity here. Those Chinese subversives must be doing a hell of a job in Australia.

    https://www.smh.com.au/public-service/the-art-of-influence-how-chinas-spies-operate-in-australia-20171203-gzxs06.html

    https://www.abc.net.au/news/2018-05-29/chinas-been-interfering-in-australian-politics-for-past-decade/9810236

    https://www.abc.net.au/news/2018-02-22/book-reveals-extent-of-chinese-influence-in-australia/9464692

    https://www.bbc.com/news/world-australia-43193146

  • avatar
    Big Al from Oz

    vvk,
    How can my comments be construed as anti American, let alone connected with the Chinese?

    This article is about EUROPE.

    I want America to have a more liberal economy so more in the US can benefit.

    America is facing steep competition and like sports you can’t play the game and make your or change the rules as the game is played. This how Trump operates.

    You only will end up pi$$ing your competition and they will leave you. You then are out of the game, with less.

    How hard is it to play the game?

    • 0 avatar
      antiquepacbell

      Europe doesn’t want any American trucks derp, derp but stop the chicken tax. BAfo, the US has the biggest or second biggest economy in the world depending on how you calculate it. The recent tariffs are not going to cause the growth to stop. Trump always leaves himself an out. Yet you continue to beat the chicken tax to death. So someone can import a few thousand, unprofitable to the US, units a month. It doesn’t even make sense.

      • 0 avatar
        Lou_BC

        “Trump always leaves himself an out.”

        Yup…. blame immigrants, Muslims, Chinese, caravans of refugees, Obama and every other prior president, blame Republicans that didn’t embrace him, blame Democrats, deep state, Bezos/Amazon, blame…well,insert country here_______, insert twitter rant here_______!

        He got SFA done with a Republican congress and Senate.

      • 0 avatar
        Big Al from Oz

        Antique,
        Welcome to TTAC,or might I assume you are a part of TTAC?

        You are full of it.

        It has become apparent the staunhest Trump supporters are selfish and are blaming others than themselves for their fear and woes.

        You guys don’t care about the US. You use this Nationalist facade to hide behind, to mask your insecurity, fear and failure.

        As they say in Australia, “stop your fncking whinging and have a go”. Grow up and act like you have balls.

        The World didn’t single out the US the US is not an underdog. The US plays and must compete, as other than the US 80% is the world.

        The US has so much potential and yet you and those of your ilk want to live in the past. The past is gone, the future lies ahead, so, if the US is uncompetitive making vehicles, admit it and adjust to suit market forces.

        Stop whining and put effort in because the World will leave you behind.

        • 0 avatar
          highdesertcat

          For almost two years now, President Trump and his administration are proving that the US doesn’t have to play and doesn’t compete.

          Now if the US chooses to play, it will be on America’s terms: to wit, renegotiations of trade agreements, tariffs etc.

          Seems to work for President Trump and the US. Look at what has happened to America’s Steel industry, and Aluminum industry, mining and America’s energy industry.

          Outstanding achievements and progress.

          I dread the day that the lefty libbies come back into power and drive America back into poverty, welfare, foodstamps, redistributing America’s wealth, and go on a global apology tour.

  • avatar

    Still an interesting move Trump is making – The Germans can avoid having to face higher import duties by manufacturing their cars in the U.S. Ergo: more jobs in the U.S. Might even become painful. Will the EU levy higher tariffs on Made-in-the-USA, German cars then?

    • 0 avatar
      Big Al from Oz

      voyager,
      BMW is moving jobs out of the US due to new import tariffs and high metal costs, not building in the US.

      BMW need exports from the US.

      Wishful thinking on your part.


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