LOS ANGELES.–Saying he “couldn’t care less” about imposing 25% tariffs on foreign automobiles, 78-year-old President Donald Trump held tough to get the European Union to stop slapping tariffs on U.S. auto imports in the EU. Gone are the days when American cars were too big or clumsy for the fuel-efficient EU market, looking more for compacts to compete with major EU car companies. Imposing tariffs on EU automakers, Trump wants the EU to drop its tariffs on U.S. autos, something that’s hindered U.S. auto sales in Europe. Ford and Chevrolet used to produce a wide line of cars for the EU market until the EU started imposing stiff tariffs of at least 10% plus certain taxes, making it more like 20% to American automakers. Trump wants EU automakers to build cars in the U.S. if they want to avoid tariffs something many German and Japanese companies already do.
Trump wants to EU car companies to take over shuttered U.S. auto factories and start creating good American jobs. Trump doesn’t take a position on whether foreign automakers manufacturing in the U.S. have to join the United Autoworkers union, only that they build out factories to create American jobs in the United States. Trump’s tough position on tariffs has prompted the fake news to claim it will cost American consumers billions in higher prices. But like everything else, American car consumers aren’t obligated to pay higher prices but consider the advantages of buying American cars. When it comes to buying U.S. pickup trucks, the U.S. has has a virtual lock manufacturers making trucks in the U.S. “I hope they raise prices, because if they do, people are gonna buy American made cars,” Trump said. Trump wants to stimulate more domestic manufacturing.
Americans car companies have caught up with European carmakers long ago with the cars comparable in terms of size and fuel efficiency. There’s just no excuse for the EU to tariff U.S. products as a form of trade protectionism. Trump wants to lower the $235 billion trade deficit with the EU, something far worse with Asia at $620 billion. When it comes to Canada, the trade deficit stands a $63 billion, with the trade imbalance with Mexico $171 billion. So when Mexico and Canada complain about Trump tariffs, they should think twice about the current trade imbalances that cost Americans billions in higher prices. Canada and Mexico act like the U.S. exploits them on trade, when it’s exactly the opposite. When it comes for foreign automakers selling in U.S. markets, it’s doubtful they would raise prices knowing that American consumers would only pay so much for their vehicles.
Trump’s approach comes from the right place of his American First foreign policy, while, at the same time, trying to fight generations of unfair trade practices by the EU, Mexico and Canada. When it comes to the California wine industry, they already pay the EU a 25% tariff on wine and 100% tariff on sparkling wine. So when Trump proposes a 200% tariff on liquor imports to the U.S., he wants the EU to stop its proposed 50% tariff on American whiskey. Trade wars go both ways, with the EU, Canada and Mexico crying foul when their protectionist trade policies have gauged American consumers for years. Most wine experts agree that Nappa wine makers have long surpassed EU wine makers for years yet they’re seldom sell in French, German, Spanish and Portuguese markets. Trump wants the trade imbalances to shrink to help American consumers.
When the fake news reports about Trump’s tariffs, they blame Trump for the current sell-off on Wall Street and increase inflation. Economists know when the current inflationary cycle started with Biden’s whopping pandemic stimulus bills, then, in 2022, the Russian oil embargo created worldwide oil shortages and skyrocketing prices, fueling the worst inflation in 40 years. Now suddenly the fake news blames Trump for inflation because he’s trying reduce the egregious trade imbalances that have gone on for years? Putting pressure on the EU, Mexcio and Canada to reduce tariffs on the U.S. hasn’t yet yielded results. But that doesn’t mean that trade protectionist policies won’t change in the near future. Trump’s approach to tariffs are to open up a bargaining platform to begin negotiating on reducing glaring trade imbalances that have gone on for years unchecked.
Foreign car manufacturers aren’t likely to raise U.S. prices knowing they’re already getting plenty of profit out of the U.S. market. Many foreign automakers already moved manufacturing to the U.S. to avoid the day when tariffs would hit. When Trump says he hopes foreign carmakers raise prices, he’s being sarcastic. He wants foreign carmakers to build more cars in shuttered U.S. factories to create more American jobs. When it comes to the vast array of other imports from the EU, Canada and Mexico, Trump would like to see less trade protectionism and more open markets. Mexico and Canada have made a fortune off tariffs, preventing U.S. industries from selling into their markets for years. Trump’s message to the EU, Mexico and Canada, with their whopping trade imbalances, is to stop ripping off the United States. For that, Trump is condemned by the fake news.
About the Author
John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He’s editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.
