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When you have to listen to Trumpite complaints concerning American trade partners who snatch the United States, a particular grievance emerges regularly: American roads and garages are full of Volkswagens, Hyundais and Toyotas, but the rest of the world will not buy American cars.
Europe is the main target of this outrage and the old statistic gets another diffusion That the EU imposes a tariff of 10% on the cars of the United States, four times more than 2.5%, the latter loads the cars of Europe. In reality, it was long-standing automobile protectionism in the United States that has favored a swirling and non-competitive industry worldwide and one that has now been late in the electric vehicle revolution (EV). Donald Trump absurd 25% price on cars and car parts shows that he learned the wrong lesson.
To respond to this well-used point of discussion: EU's import right to standard cars such as Hayons and Mini-Fourgunnettes is indeed 10% against 2.5% of the United States. But the American production of light trucks, including vans, has long housed behind a 25%price wall. The duty is known as “chicken tax” after Lyndon B Johnson imposed it in 1964 in retaliation for European samples from American poultry.
Industry experts say that the three major Detroit – Ford, General Motors and Chrysler automobile companies (which are now part of the Stellantis group) – have therefore increasingly concentrated their innovation on the manufacture of vans and used the same platforms and components to develop large -scale sports services (SUV). Felipe Munoz, principal analyst of the Jato Dynamics market intelligence, told me that even if the vans and heavy SUVs were only 17% of the sales of US light vehicles, “this is where the three large American manufacturers earn the most of their money on the American market”.
The rest of the world, however, tends to have narrower roads and higher fuel taxes than the United States. “Protection has rendered the American car manufacturers less competitive in the world,” said Munoz. Japanese companies make popular family cars in the world: Detroit does not do so. THE larger car exporter The United States is the German BMW, not an American manufacturer.
When the American car manufacturers have really responded to their European customers, they succeeded, including by manufacturing there. Ford has had a long -standing position on the European market, in particular by being constantly one of the best -selling brands in the United Kingdom. But it is now in difficulty, having Stopping smaller popular cars Focus on SUVs. GM five years ago Sold the Opel brand It has run in Europe for decades to focus on larger vehicles on its domestic market.
It is not the protectionism of the EU that harms American car manufacturers abroad. The European Commission has long been an offer open in the United States to reduce all prices for industrial goods, including cars in Nile, which the United States has not succeeded. The feeling of victimization persists at the moment.
Despite Tesla's pioneering role in electric vehicles, traditional American manufacturers have sold the land to China while being slow to move into the new technology, even more than their slow European counterparts. The EU recently adopted a pragmatic approach to use targetswith joint venture and technology transfer With Chinese companies, to give its space manufacturers to catch up on its domestic market.
But the Biden administration tried to create an EV North American industry behind a protective wall. He has created limited tax credits while struck Chinese imports with 100% prices And ban Chinese car software, pressing Canada and Mexico to do the same. Since 2023, the Share of electric vehicles In total, American car sales were about half of those in Europe and a quarter of that in China.
Trump went even further and imposed prices to try to repatriate automotive production from Canada and Mexico. It is a potentially catastrophic decision, even more if it removes the Current price exemption For automotive parts which are eligible for the American-mexico-Canadian trade agreement. It was nevertheless supported by the UAW leadershipthe workers' labor union, appalling his Canadian counterpart.
Increasingly, disarray in American trade policy means that relying on the American market, that is important, has serious risks. Jato Dynamics calculates that Trump's prices could actually Hit the three large, harsher American manufacturers that their Japanese and European competitors, because the former depend so much on the American market and the source of Canada and Mexico.
Flight reported this week That the Chinese manufacturer EV Byd began to consider its absence of the American market as an advantage. Unlike his tesla rival, he can continue to conquer the rest of the world rather than looking forward to the next touch and the turn, like his own vague suggestion On Monday that he could suspend cars' rates for a while.
The United States has wasted its historic advance in automotive manufacturing by the very commercial barriers against which it is carried out abroad. Trump's prices will drag him even more behind. It would be difficult to invent a more poignant warning story about the damage that protectionism can cause at home.
