From the man on the street on Trump’s auto tariffs
What is the end game on auto tariffs?
Looking at President Trump’s auto tariffs I am glad that I got a car at the end of last year and did not wait until now.
So, let me approach the auto tariffs, not as a trader or analyst point of view but as a man on the street.
I don’t get it!
I don’t understand the end game?
However this shakes out, the cost of buying a car will be higher. Given the way supply chains work, a tax on car parts would increase the cost of building a car even if manufactured in the U.S.
Don’t you think domestic manufacturers would raise the price of a car in any case to improve margins if the competition (e.g. foireign car companies) were forced to hike prices?
Now that I have stated the man on the street view, let’s compare tariffs imposed by the EU vs those levied by the U.S.
Passenger cars:
The EU levies a 10% tariff on passenger car imports from the U.S.
. levies States a 2.5% tariff on passenger car imports from the EU.
Other vehicles:
There is a 22% tariff on pickup trucks imported from the U.S.
he U.S. imposes a 25% tariff on light truck and pickup truck imports from the EU. This tariff is often referred to as the “Chicken Tax”.
Auto parts
EU tariffs on auto parts imports from the U.S. range from 3% – 4T. he U.S. tariff on imports of auto parts 0%- 2.5%, depending on the specific component.
Looking at the tariff comparisons between the U.S. and EU, there does not seem to be enpihj of a disparity that could be worked out without a 25% tariff. But I am just the man on the street trying to take an objective view. With that said, I don’t get it!
I assume President Trump has a plan for the end game that will hopefully play out and ease the angst being felt by the average man (and woman) on the street..
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