How About If We Cut Tariffs to Zero on Light Cars and Trucks?

This is the highly regarded VW Amarok pickup truck. Would you like to buy one? Too bad! You can't.Volkswagen

The German auto industry has suggested that the US and Europe become a free-trade zone in light vehicles:

That would mean scrapping the EU’s 10% tax on auto imports from the U.S. and other countries and the 2.5% duty on auto imports in the U.S….“Germany has the right approach to resolving this trade disagreement among friends,” said U.S. Commerce Secretary Wilbur Ross. “If the EU were to reduce its 10% tariff on U.S. cars and trucks, that would be a positive first step toward trade that was more fair and reciprocal.”

One catch is that the Europeans also want a 25% U.S. tax on imports of light trucks—pickup trucks, sport-utility vehicles, and big vans—scrapped. Abolishing this relic of the Johnson administration could alienate U.S. auto workers, a core constituency for Mr. Trump in the midterms this fall. Mr. Ross didn’t comment on whether the U.S. would be willing to cut tariffs on trucks.

Well, this would sure call Trump’s bluff. As near as I can tell, scrapping the EU’s 10 percent tariff on American cars would have zero effect on European carmakers. Why? Because no one in Europe wants American-made cars in the first place. On the other hand, scrapping the 25 percent US tariff on light trucks would be a boon for European carmakers. I’m sure Trump has no idea that the US has a 25 percent tariff on European pickup trucks, but hey, that’s the problem when you mouth off on stuff you’re ignorant about, isn’t it?

In any case, this is precisely the kind of “level playing field” that Trump keeps insisting he wants, so he could hardly object. Europe ought to push hard on this, just as a way of embarrassing Trump. He’d have a hard time saying no, but the US auto industry would go nuts. The last thing they need is more competition in the lucrative light truck market from the likes of Fiat and Mercedes and Volkswagen. This could be fun.


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