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      07-05-2018, 10:49 AM   #16
MarkDemma
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Quote:
Originally Posted by BD SM3RF View Post
It's a simple concept. We don't have free and fair trade now. High tariffs on US exports will lead to reciprocally high tariffs on like imports until such time as they reduce or remove those tariffs and the US then reciprocates. Then we have free trade. It's about time!
It's true that there is an imbalance here, the US imposes a 2.5% tariff on cars coming from the EU while there is a 10% tariff the other way. The question should be whether getting the EU to lower this rate would make a difference in sales of American cars in Europe.

This is highly doubtful that it would make much of an impact. With fuel prices much higher in the EU, smaller cars / engines are what sell. American car makers are moving to all but abandon selling cars at all, moving towards SUVs and trucks with larger engines and lower fuel economy. There is a niche market for things like the Mustang, but for folks that really want one and can afford a gas guzzling V8 muscle car, the extra 7.5% doesn't really matter one way or another to them.

So while technically yes there is a tariff imbalance here, and it FEELS like hey we should do something about it, the reality of it is that even if expending all this political capital and good will with our closest allies gets the concessions asked for, it won't really do much or anything to help American car manufacturers. The real proof here is that THEY aren't asking for it, in fact they are asking for them to STOP trying. If there was any way that this approach was likely to benefit US automobile manufacturers, don't you think they would be lobbying FOR it rather than against? They have done the analysis and believe it will be ultimately harmful to them, which begs the question - why are we taking this approach?