Finally, some potentially good news: in an effort to get the Trump administration to abandon its plan to place a 25 percent tax on all European auto imports, all three of the big German automakers—Daimler, Volkswagen, and NSU (just kidding, it’s BMW)—have come up with a proposal that would get rid of all car import tariffs between America and Europe. And that would include the hated Chicken Tax.
The proposal states that in exchange for eliminating the proposed 25 percent import tax and the 25 percent “chicken tax” on light trucks (which includes pickup trucks and vans, too), the European Union will drop their 10 percent tax on cars imported from America and get rid of its 2.5 percent duty on imports in the U.S.
This is a pretty bold move on behalf of the E.U.—well, actually, on behalf of Germany, who would have to convince the rest of the E.U. this makes sense, even countries like France that build lots of cars but export none to the U.S. and as a result very likely don’t give deux merdes about any tariffs.
This would potentially be a very reciprocal deal, arguably even one that would benefit the Europeans more, since it would get rid of tariffs that have been in place for decades, in the case of the Chicken Tax, and open up the U.S. market to trucks and commercial vehicles from Europe, and, as a side effect, all over the world, including Asia.
From the American perspective, this could be a way out of the tariffs, which are not a popular idea here in America, and many think such a tariff would have massive detrimental effects here in the U.S. as well. Aside from some supporters who want protections for U.S. car manufacturers, the European car tariff is not generally liked.
So, even though the benefits to Europe (especially Germany) may be somewhat greater than what the U.S. appears to get out of such a no-tariffs-at-all deal, this proposal may still be the best way for the Trump administration to turn the tariff proposal into a win instead of a potential disaster.
They could take the deal, tout it as an example of how well Trump played the Europeans or whatever, and the end result will be that American consumers have an even greater selection of cars and trucks to buy, and the really very global auto industry (remember, nearly every BMW SUV is built in America) can do business without hinderance.
While the proposal is interesting, it’s by no means a done deal; Germany would still have to convince the rest of the E.U., who would then have to sit down with the Trump administration to make a deal. We’ll just have to see how this all plays out.