Politico reports EU says it is willing to scrap car tariffs in US trade deal.
>“We said that we are ready from the EU side to go to zero tariffs on all industrial goods, of course if the U.S. does the same, so it would be on a reciprocal basis,” Malmström told the European Parliament’s trade committee.
>“We are willing to bring down even our car tariffs down to zero … if the U.S. does the same,” she said, adding that “it would be good for us economically, and for them.”
>The EU’s car tariff of 10 percent is higher than the general U.S. auto tariff of 2.5 percent, but America imposes a 25 percent duty on light trucks and pickups.
I called Trump’s free trade proposal a bluff.
Dear Donald Trump …
Please prove me wrong. As a free trade advocate, I will be more than pleased to admit I was wrong.
Mike “Mish” Shedlock
Mish — You have some good insights on several issues, which makes it worth continuing to come back here. But whenever President Trump’s name is involved, you seem to lose the plot. Just listen to what the man says, and it mostly becomes clear.
For the first time in goodness knows how long, the US has a President who puts the US and the interests of its workers first. That is refreshing!
Fair Trade is more important to him than (Unilateral) Free Trade. 0% tariffs are good — if they apply to both sides. Same with 25% tariffs. And he is aware of the importance of non-tariff barriers — a critical item which does not even exist in the theoreticians’ over-simplified free trade model.
He is a negotiator. He understands that he is involved in a long process of reversing a generation’s worth of Swamp Creatures’ self-dealing (which sacrificed the interests of US workers along the way). He knows we are not going to get to Nirvana in one easy step before the commercial break. Would that Unilateral Free Trade activists were as realistic!
2.Same with 100% tariffs, And infinite ones. So that government can take every penny spent on anything containing a single molecule that has blown in from some “other” place. It’s all the same, as long as it’s “fair.” Like in some simplistic Football game where the drones are supposed to cheer for one side as uncritically as possible.
Again, that’s what all the Men on TV says!!
From a market perspective though, a lot of our products are usually hard sell in the EU anyways. The stringent regulations (think organic) kills our advantage. Most of our product classification of GMO free is different than theirs. That’s just one part.
I mean you can’t force your customer to buy your product. If given zero tariffs altogether, you’ll still pay for their audits.
Actually, Trump said of the EU, [it’s not their tariffs,] they’re worse than China, only smaller (which !surprise! isn’t actually true in terms of the size of the economy and the market).
Mish, could you explain what would happen if Americans stopped buying so many imports so that the balance of trade in goods would be zero, while simultaneously borrowing upward of a trillion dollars a year above tax revenues?
Their eliminating a 10% tariff in exchange for us eliminating a 2.5% tariff is a good deal. The pickup truck stuff doesn’t matter. Are there any pickup trucks made in Europe? I know Mercedes is big on utility vans, but it’s still a good trade off IMO.
The pickup tariff was instituted to protect American pickup manufactures; Ford and others will certainly be challenged…
Assuming this 25% tariff applies to Asian produced pickups, reducing that tariff, would be extremely “disruptive” to Detroit.
“As Bloomberg notes, eliminating tariffs on U.S. auto imports “would do little for General Motors Co. and Ford Motor Co., but would lend a major boost to Germany’s BMW AG and Daimler AG.” SUVs assembled by the German carmakers in the American South dominate the models exported to Europe from the U.S.”. Why trust the EU when they admit you have to lie when things get serious.
Mish – so much hate against DJT and yet he now has the EU at the bargaining table with zero tariffs for cars.
Eight years of obama rolling over and playing dead – nothing we can do…globalism…manufacturing is dead in America…jobs Americans won’t do…we will be a new service economy…sling that coffee while I blow bubbles with QE and ZIRP….utter bullsh!t.
And not a peep from you.
No, the EU accepted Trump’s bluff – we will soon find out Trump is a liar. If not, I will be hapopy to admit I was wrong
Mish – have you ever negotiated hard for anything in your life? Especially from a position of strength?
This is called setting the lower limits and giving small concessions. Round 2 coming up…
Most likely with new pressures.
I think the issue is that they’ve acknowledged it and this is a classic game theory. While he’s been good at it, looks like he probably made the wrong calculus during his initial offer. I’m not sure if he’s still going to budge at zero for zero. EU’s food requirements are pretty tough. No GMO, audits, etc….
Zero on industrial goods….HOW About Agricultural goods…. France is notorious for it’s protectionism!!!
You seem to be ignorant about the massive US subsidization of farm products and ethanol.
and dairy, in contrast to Canada where the dairy sector costs the government nothing.
Yep. But also I don’t think EU will be accessible necessarily. EU farm product requirements are also notoriously stringent.