US President Donald Trump also wants to achieve with his crazy rates that more US cars are exported to the European Union (EU). But the calculation of Trump will not work, my experts. Because Europeans cannot do anything with American car models.
Since Thursday, extra rates of 25 percent of all cars and car parts that are imported into the US are in force. Trump had justified this with the fact that Europe isolating itself too much. “One of the reasons why I introduce rates is that we take millions of their cars BMW, Volkswagen, Mercedes-Benz,” says the 78-year-old. At the same time, it is “almost impossible” to perform our cars in the EU.
“This is the big problem of the American manufacturer”
Experts criticize Trump’s logic: although few American cars are exported to Europe, there are no trade barriers or rates to blame, but the car models. “This is the big problem of American manufacturers that the flavors of European consumers simply do not touch,” says industrial expert Stefan Bratzel of the center of Automotive Management in Bergisch Gladbach.
American cars are “just unchangeable in the EU,” says industrial expert Ferdinand Dudenhöffer: “You can’t sell a car with eight cylinders and 15 liters of consumption.” The vehicles are too large for Europe, the fuel consumption is much too high in the light of European fuel prices. The only exception that sells well in Europe is Tesla, says Bratzel. “But Tesla now has other problems.” In the first quarter, the turnover of the e-car manufacturer was reduced by 13 percent.
Trump: Car manufacturer should move to the US
Trump advertises that car manufacturers are supposed to move their production facilities to the United States to bypass the rates this could increase the export of American cars. “If you produce your car in the United States, you will earn a lot of money,” he says in an interview with the American broadcaster NBC News. “If you don’t, you should probably come to the United States, because if you produce your car in the United States, there is no customs.”
No American car is saved from rates
But Trump’s calculation does not work: even cars made in the United States suffer from the rates. Because the vehicles include components that are imported from abroad – and rates are also charged. On average, 25 to 60 percent of all parts installed in an American car will be made from Mexico and Canada, as the TV station CNN reports.
As a result, the production of cars in the United States is becoming more expensive. According to an analysis by the Bank of America, rates increase production costs by around $ 4,000 (3634 euros) per car, as CNN writes. As a result, cars must also become more sensitive to consumers. This in turn can make the sale of American cars in the EU much more difficult.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
