They're being intentionally dumb. By being dumb it increases the brute force of the tariffs, rather than being bogged down by detail.
Basically, Trump has approached trade in the same way as liberals in the past used disparate impact to disrupt what they saw as American segregation. Prima facie fairness doesn't matter: quotas and representation and results are what matters.
Zaid, I do agree that for lower end cars, America quality has lagged Europeans, and this is a contributing factor to low US car sales in the EU. I drive a 2019 Volkswagen, but note it was built in Mexico. Good car so in my immediate experience the Mexicans can build great cars, too. One thing to add to your analysis that I’d suggest is missing. And that is the non-tariff or non-monetary EU barriers to US car sales. These include VAT taxes and high safety standards and tests. Regulations that bow at the alter of climate change if you will. These are often Brussels dictated. The Trump tariffs might undermine the EU bloc if certain countries (like those in east Europe) want to strike trade deals w/ USA but Brussels stands in their way. And cars may be the poster child for this. Interesting times!
I think it goes beyond where the car itself is physically made. I don't think there's a huge difference between Hondas made in America and those made in Japan (OK maybe a small one). But the brands themselves just have better engineering and quality.
I agree for the most part. I drive a GTI (manual!) but this particular car has just seen German engineering apply continuous, small improvement tweaks since this car first came out (as Rabbit) in 1975. In my cars’ case, that was 45 years of incremental improvements. Now… if they could only get back to a more ‘analog’ cockpit, I’d be in Gen X heaven. Something about volume up and down w/ a dial I prefer…
I have driven foreign cars my whole life. But my next one may be American.
My wife drives a Toyota Highlander and its super reliable. But when in the shop (fender bender) we had a Ford Explorer with twin-turbo V6 and I enjoyed that more than the Toyota. The immediate power was impressive. So, that's what I'm considering for next purchase. Have owned Subaru's and Honda's over the years too. I'm old school and will likely never buy electric. Tesla's seem to be a mixed bag. The cyber truck is not my cup of tea. Screams over the top 'alpha!' to me ;)
VAT is an end consumer tax which is applied to all vehicle purchases regardless of the country of origin. Fun fact, consumption taxes, on average, provide the largest share of taxation revenue for OECD countries
This also means that the money OECD citizens pay to consume products (and taxes paid on those purchases) — remains in their country/region. The ‘wealth’ stays home. Because they are overwhelmingly buying EU products (for bigger purchases like cars). These countries also have little to no national debts. Hey, that’s what America wants!
you developed your own theory because that what liberals do. esp when it comes to Trump. He asks questions a lot of times just to get people to think. It's not because he wants people to answer him. He knows the answers. He also realizes our industries, specifically our manufacturing and auto industries, have been driven out of the country. Bringing them back home will help create more jobs and innovation. China refuses our vehicles because they think we have the ability to track their infrastructure via geo-mapping. Likely the same reasons other countries refuse them. They know our capabilities and also, don't trust them. I know because you are from another country and got over here and take advantage of our educational and political system.... likely for the sole purpose of undermining our policies AND our country..... and you enjoy our free speech and all.... but, this is not journalism. and you are not that important.
My 2004 Scion Xb has 390,000 miles . Original engine, original transmission. I’ve stop buying American a long time ago . My family has a Toyota Highlander & Honda passport.
My Japanese Toyota 4Runner with 220k miles in great condition is still worth 14-18k. A Ford Explorer with the same mileage and care is worth almost nothing to nothing because they deteriorate much faster.
The cars may be unpopular but there is a real lack of symmetry between the EU’s 10% tariff on US cars versus the corresponding 2.5% the US levies in the opposite direction.
It may well be that with no tariff American cars still wouldn’t sell. That’s a separate issue though from the tariff question.
As I mentioned above, Tesla and Ford do produce in Europe which helps them avoid any tariff. But I wouldn’t say Teslas year over year sales drop is due to tax policy.
Sales and tariffs are related but not identical. To some extent American cars suck. That's a completely separate issue from whether a 2.5% US tariff makes sense in the face of a 10% EU tariff. Why no parity?
They're being intentionally dumb. By being dumb it increases the brute force of the tariffs, rather than being bogged down by detail.
Basically, Trump has approached trade in the same way as liberals in the past used disparate impact to disrupt what they saw as American segregation. Prima facie fairness doesn't matter: quotas and representation and results are what matters.
Perfectly written
Zaid, I do agree that for lower end cars, America quality has lagged Europeans, and this is a contributing factor to low US car sales in the EU. I drive a 2019 Volkswagen, but note it was built in Mexico. Good car so in my immediate experience the Mexicans can build great cars, too. One thing to add to your analysis that I’d suggest is missing. And that is the non-tariff or non-monetary EU barriers to US car sales. These include VAT taxes and high safety standards and tests. Regulations that bow at the alter of climate change if you will. These are often Brussels dictated. The Trump tariffs might undermine the EU bloc if certain countries (like those in east Europe) want to strike trade deals w/ USA but Brussels stands in their way. And cars may be the poster child for this. Interesting times!
I think it goes beyond where the car itself is physically made. I don't think there's a huge difference between Hondas made in America and those made in Japan (OK maybe a small one). But the brands themselves just have better engineering and quality.
I agree for the most part. I drive a GTI (manual!) but this particular car has just seen German engineering apply continuous, small improvement tweaks since this car first came out (as Rabbit) in 1975. In my cars’ case, that was 45 years of incremental improvements. Now… if they could only get back to a more ‘analog’ cockpit, I’d be in Gen X heaven. Something about volume up and down w/ a dial I prefer…
I have driven foreign cars my whole life. But my next one may be American.
The only American car I've owned is a Tesla and the shoddy build quality did not endear me to buying American again
My wife drives a Toyota Highlander and its super reliable. But when in the shop (fender bender) we had a Ford Explorer with twin-turbo V6 and I enjoyed that more than the Toyota. The immediate power was impressive. So, that's what I'm considering for next purchase. Have owned Subaru's and Honda's over the years too. I'm old school and will likely never buy electric. Tesla's seem to be a mixed bag. The cyber truck is not my cup of tea. Screams over the top 'alpha!' to me ;)
VAT is an end consumer tax which is applied to all vehicle purchases regardless of the country of origin. Fun fact, consumption taxes, on average, provide the largest share of taxation revenue for OECD countries
This also means that the money OECD citizens pay to consume products (and taxes paid on those purchases) — remains in their country/region. The ‘wealth’ stays home. Because they are overwhelmingly buying EU products (for bigger purchases like cars). These countries also have little to no national debts. Hey, that’s what America wants!
Don’t tell me you’re one of those “VAT is a tariff” types. And you gotta add crash test standards too.
Where exactly will the goalpost move next?
The goalposts just moved to 104% import tax on China. Does DJT or Xi blink first?
Very interesting post!
you developed your own theory because that what liberals do. esp when it comes to Trump. He asks questions a lot of times just to get people to think. It's not because he wants people to answer him. He knows the answers. He also realizes our industries, specifically our manufacturing and auto industries, have been driven out of the country. Bringing them back home will help create more jobs and innovation. China refuses our vehicles because they think we have the ability to track their infrastructure via geo-mapping. Likely the same reasons other countries refuse them. They know our capabilities and also, don't trust them. I know because you are from another country and got over here and take advantage of our educational and political system.... likely for the sole purpose of undermining our policies AND our country..... and you enjoy our free speech and all.... but, this is not journalism. and you are not that important.
My 2004 Scion Xb has 390,000 miles . Original engine, original transmission. I’ve stop buying American a long time ago . My family has a Toyota Highlander & Honda passport.
My Japanese Toyota 4Runner with 220k miles in great condition is still worth 14-18k. A Ford Explorer with the same mileage and care is worth almost nothing to nothing because they deteriorate much faster.
India has a 100% Tariff on USA Cars, why ?
The cars may be unpopular but there is a real lack of symmetry between the EU’s 10% tariff on US cars versus the corresponding 2.5% the US levies in the opposite direction.
It may well be that with no tariff American cars still wouldn’t sell. That’s a separate issue though from the tariff question.
As I mentioned above, Tesla and Ford do produce in Europe which helps them avoid any tariff. But I wouldn’t say Teslas year over year sales drop is due to tax policy.
Sales and tariffs are related but not identical. To some extent American cars suck. That's a completely separate issue from whether a 2.5% US tariff makes sense in the face of a 10% EU tariff. Why no parity?