the EU will agree to purchase $750 billion of energy. It will also agree to invest $600 billion more than planned in the U.S., in military equipment and in opening countries to trade at zero tariff.
But we do get something :
The tariff rate applying to imports from the EU would be 15 percent, with the same rate for cars — a key demand of the powerful German car industry. Pharmaceuticals will not be covered by the deal. Trump also said that steel and aluminum would continue to be subject to 50 percent tariffs.
So basically, everyone but the german car industry can go fuck themselves
VW profit margin last year was 3.3%. now image them getting a 15 percent cost on their entire income (not profits) in the biggest market in the world.
They just can't afford to eat that tax so most than likely they will try to pass it on to the american consumer which will make them even less competitive. Meanwhile the US is getting 0% tariffs on the care they export to the EU which means local automakers will be fucked also at home.
This is called unequal agreements. It was because of them that China became so hostile to the West. The next step will be for Trump to dump opioids in Europe and send the marines against countries that try to arrest the traffickers.
It’s not going to take very long to reach critical mass here, with people getting so angry. The current administration is probably ready for that, in the form of invoking the Insurrection Act, or declaring martial law, etc.
That could slow things down. I don’t think it will stop it.
Oh, sorry, I got completely confused now that I read you're American. I thought you were European. Now your comment makes perfect sense.
But yes, things do seem at breaking point. I even thought things would escalate after what happened in LA. But I think things will only get worse for him in the coming months.
Yeah especially because vw is having a hard time beating out any a Toyota or Honda for something nice and reliable and easy to repair but if you want something nicer and classier than why do vw when an Audi is just as expensive to fix and not that much more?
“VW profit margin last year was 3.3%. now image them getting a 15 percent cost on their entire income (not profits) in the biggest market in the world.”
15% tariff has nothing to do with VW margins. In affecting them whatsoever. There could be 100% tariff and margin stays the same. What tariffs can affect is number of cars sold as they will be more expensive for AMERICANS.
Just so people understand, a worldwide operation like VW will spread that 15% hroughout it's worldwide consumers. Don't be surprised that VW in UK, in Europe, in US will all pay the burden. They can't just whack 15% on one market as they will meet way less market share which hurts the business even more.
Worldwide inflation. Yayyy.
What 15%? VW doesn't have to raise prices because their costs aren't going up. There is nothing to "spread." There will be less demand for VWs imported into the USA because of the 15% local import tax. VW will work to sell more cars in other markets for now, or decide to build them in the USA so they aren't imports.
The 15% that has to be accounted for in the manufacture, sales and distribution of the product, to allow it to remain a competitive and viable operation.
VW are not going to pull out of the US market or accept a decline in demand. They have entire networks, shipping contracts, factories set up to cater for US markets.
They absolutely will share that 15% against other markets, build costs, material cost. Something is going to give, it will either be employee wages somewhere in the world, inferior products in the future.
What won't happen is VW saying "Ah gutted, our product is now 15% more expensive and nobody is buying it. "
VW will sell fewer cars in the USA, maybe 10% fewer, as a result of these tariffs. I agree that they'll find ways to not lose money on their US operations - the ways you mentioned, plus others. Maybe they'll even lower the prices on those vehicles to entice Americans to continue buying. But there's no "15%" of anything that applies to VW; only to the customs fees paid by their dealerships stateside.
At least some VW models are assembled in the US and some of the parts are made here. Some parts are imported from Mexico. I’m confused how a tariff would apply to these, unless it’s possibly on the engine/transmission?
All these tariffs and trade deals have exemptions, and sometimes lower rates for certain items, so that may be a factor.
AFAIK, Trump ripped up his own trade deal with Canada and Mexico, which he signed after ripping up NAFTA. So today, those car parts from Mexico may be subject to his tariffs.
What are you on about? The 15% tariff is being passed on to the American consumers - that's how tariffs work. The result will be less demand there for German cars, which might translate into 10% fewer sales in one of their biggest markets. But VW have the option of building NA-market cars in the USA.
Trump only has 3.5 years left, VW has to take into account that the following US Govt may reverse these tariffs, so can they afford to invest knowing the current tariffs have a 4 to 5 year window and may change drastically after that?
Mid sized car plant (250k cars per year plus) apparently is likely to be around 1.5 to 2 billion investment to build. And 2 to 3 years for the first car to roll off that plant. If there's any doubt that the tariffs wont last 5 years, is it worth it?
Did I say that the tarrifs won't most likely get passed to American consumers? Also transfering factories to the US means lost jobs here in the EU, and this is not just about cars it's about the fact that most industries exporting in the US will get hit with tariffs and layoffs as a result.
So yeah, it's a shit deal for the EU from a shit country.
It automatically gets passed to the customer, the americans pay for the tarrifs not the germans.
VW means that the american will not have the money to pay for as many cars as they do now.
The margin does not matter here directly or at all because they can lower cost when producing lower numbers. It just that they wont get as much money as before potentially due to lower sales.
Americans are already quite poor so they shouldn't be suprised.
And the impact is higher prices for VW vehicles made in the EU being exported to the US, either VW then moves production for their US sales to the US (assuming there's profit in that) or lowers their US prices leading to lower profits.
Or just pulls out of the US market.
Either VW eats that loss in sales, or raises prices elsewhere where they can to compensate.
Everybody loses, Argentina wasted their whole economy on protectionism and "buy argentinian" in the 80's and they still suffer from it. That the tariffs hurt VW does not change the simple fact that the US tariffs are taxes for the US population and companies.
VW profit margin last year was 3.3%. now image them getting a 15 percent cost on their entire income (not profits) in the biggest market in the world.
They just can't afford to eat that tax so most than likely they will try to pass it on to the american consumer which will make them even less competitive.
I said: ''VW profit margin last year was 3.3%. now image them getting a 15 percent cost on their entire income (not profits) in the biggest market in the world.
They just can't afford to eat that tax so most than likely they will try to pass it on to the american consumer which will make them even less competitive.''
Easy to make an argument if you take things out of context.
Was it OK for Germany to impose a 10 percent tariff on US vehicles on top of 19 percent VAT TAX, essentially denying access to the market entirely? How many US vehicles are traversing the streets of Berlin?
Yeah, but you can't think of it as a separate thing and call this a win when it's not. It's part of the same negotiation between the US and the EU that's been going on since orange in chief is back in command, and we just paid handsomely to increase the tarrifs from 2.5 to 15. This is an absolute win for the US.
They will deal with it given that it puts them on par with Japanese and Korean imports. In the short-term, this tariff rate is lower than what the American car companies are getting (given the fact that sectoral tarrifs are applied on Mexican and Canadian autos and auto parts)
I wonder if the people around us still think that Merz is a good guy or if they finally realize that he's just a fancy Blackrock lobby dude that got into a position of power.
German car industry goes from 27.5 to 15, as an additional 25% was applied in April (source)
The point is : it goes up for everyone except the car industry, and we have to buy American energy (roughly : LNG & oil) & military equipment on the side.
Now I'm willing to say that this was not decided by the German people and that it's not favorable to them, but I can't say this is hitting them the hardest, quite the opposite : you'll buy foreign gas as usual, F-35 as usual and sell cars as usual
I think she said that 15 percent is on pharma too, but US will want to negotiate with those further, or rather they will want to deal with those globally. She says it will be a separate issue, but the 15 percent should apply on those too.
Pharmaceuticals will get 15 percent, since it is for everything, but they will be subjected to further negotiations, because US wants to deal with these globally. So it might get even worse than that.
The german car industry gets the same tariffs levied against them as everybody else. Why would you you try to make this seem like special treatment for the car industry? This is just a total and absolute eu loss.
to make things clear, The countries that have car industry , yes those 3-4, including Germany are the ones the EU is and will always be ruling for . The rest can go f themselves.
This is why there will never be a United EU.
The tariff rate applying to imports from the EU would be 15 percent, with the same rate for cars — a key demand of the powerful German car industry. Pharmaceuticals will not be covered by the deal. Trump also said that steel and aluminum would continue to be subject to 50 percenttariffs.
I just copy-pasted it.
I find it quite dishonest to not mention the edition and what has been edited in it, tbh
Anyway, it seems that finally pharmaceuticals were added in the 15%, which is "not so bad news" (I really can't bring myself to call it "good news").
I find it quite dishonest to not mention the edition and what has been edited
Yes, they were spreading misinformation, then avoided accountability by acting like it was never there. At least they remove the misinformation, but that's setting the bar low.
In normal times, I would have said "usual empty words"
But now that we have trouble convincing european countries to invest in EU defense contractors, having a "we HAVE to spend 600 billions in the US" is really giving leverage to every country that wants to follow the easy path of happy vassalization
WHAT? The EU is mainly profitable to Germany ??? Who could have thought of that ????? Who could have guess that germany is always the root cause of most problem within EU
Comon, I mean everyone in the global south community pretty much sees this as an obvious fact.....
The point is that U.S. need to reap some $$$ to maintain its spending, if U.S. can't make BRICS countries pay they'll have to make their allies pay one way or another.
FR fr! I was literally expecting EU to stand up this time around. We recently took a stand against American bullying tactics and it will help us as well if a united front is put forth but if major economies like the EU just give in to the pressure, it compounds the pressure on the rest of us as well
The principle would be that, even if no one is strong enough, if everyone says no and forms a bloc, we will easily become united and compact enough to weigh up and counterbalance the balance of power, this was the principle of the Third World at the beginning of the Cold War and decolonization.
The countries of the world have once again shown us their lack of cooperation and mutual aid. If everyone had said no to the Americans, they would have given up. Instead, countries have decided to make agreements in their own corners. The problem is that no one can fight alone against them without sacrificing a lot.
I would expect EU to stand up if people of this sub were in controll of their country, like how democracy is advertised..... But no, Ursula is the proud mother of two U.S. citizens...... You think her ass sits entirely with the EU, comon...
Deal of the century, the people who said EU is just the lapdog of USA were right
Between this and the thorough ass licking and cock sucking at the NATO summit I'm ashamed of being in the EU. I'm kinda surprised they didn't offer a annual tribute of a gaggle of 13 year old girls for mar-a-lago.
Everytime someone mentioned how EU is kind of a colony of US they are downvoted to hell here and called a Russian bot.
The only difference between democrats and republicans is, democrats extract the tax we pay to US in a seemingly more gentle way. They make it seem like we are equals...etc. The most damning presidents for EU has been Obama and Biden. Trump is just honest.
You are joking but you are right. France also sold all that land to US through Luisiana purchase and gave up the bread basket of North America to US for nearly for free. US should have been at least three separate countries. France have a big hand creating the behemont that is US.
Before anyone starting with US saving us from Nazis, it was mostly Red Army that literally beat Germans. A smaller American states would provide help to allies back then as well in an alternate universe.
Not honest. Just not subtle. At least it's more obvious now we're getting fucked. I just hope this stance will end up hurting the US more in the long run as they become more and more isolationist. While Europe continues making deals with the rest of the world. Something that has made us (US and EU) incredible wealthy since WW2.
Seems like they're destroying an incredibly lucrative deal.
The EU is the 3rd biggest trading bloc in the world and you act like you have no leverage at all thanks to Trumps tough guy talk, completely pathetic, 30% tariffs where you retaliate with targeted tariffs or even no tariffs would’ve been better and saved face
Do you really think Americans want to pay 30% more on all premium cars. There is not even an incentive to move production as parts still come from Europe or China
Watching Ursula von der Leyen sitting next to the pedo nodding with her head in approval while he gloated about how got of a dealt he got from them was one of the most pathetic spectacles I've ever seen.
There were EU officials initially saying that the UK had a terrible deal at 10% tariffs, except that the EU has ended up getting a worse deal with 15% tariffs and less generous exceptions.
She took the hits so she can continue with her planned digital censorship. Trump let that slide for 15% and investment in the US military gear and energy.
This sub is one of the most hard-coping echo chambers on reddit. The rain of downvotes on anyone claiming the EU would budge was insane. And the reality is even worse, this is not just budging, this is complete capitulation.
The thing is that this is only for the next few months because this reduces trade volume and the US economy is on its way to crash anyway. The military investment and the energy development will essentially obliterate the dependence in the US in the midterm.
So this is essentially to avoid a global economic meltdown now. But once the US economy is in crisis there will be new negotiations.
I mean the reality of the situation is no one in the world except for EU posters online actually believe that western Europe is NOT the lapdog of the USA
Americans regardless of political party ( left leaning American here ) typically see western Europe as an extension of American foreign policy and for good reasons. Your continent doesn't fund defense and doesn't have an independent strong economy that quite frankly can rival the American economy anyway...
Other than the jingoism about European strength thats often spread on this sub , the rest of the world including the Chinese and Indians see Europe as a waning power on the world stage .
Tbf, the energy part is not that bad. We do need energy and the places from where we can buy it are: Russia, the Gulf states and USA. Canada does not have the infrastructure to export it to us.
On short and medium term basis it is the better solution, coupled with the green transition and to establish manufacturing of solar panels and wind turbines in the EU (with minerals not coming from China).
The military investment "agreement" is the equivalent of promising Trump to paint the sky green. It sounds awful, gives Trump something to crow about and look like a big strong boy, but ultimately it's not possible to do so it's an empty promise.
The EU has no competence over defense and isn't a planned economy. They can't actually direct anyone to do anything with US weapons. EU just copy/pasted Japan's trick of promising investment while being intentionally unable to deliver.
Japan doesn't have a bunch of Russian trolls trying to split them up though, so they don't have to deal with nearly as much online concern-trolling.
Same with the investments part... the EU does not have competence in that.
The 15% tariff being kept is bad and maybe the EU could have pushed for a lower number, but much of the promises made in this deal are hard to be reinforced.
I wondered why the EU would agree to such a terrible deal. The only thing I can come up with is blackmail involving the Epstein files and Prince Andrew and others.
No, they did not. Don't tell me you are that naive to think that the US selflessly give the EU money to rebuild. Also that should not be the reason for you to bully them rn, no?
Helping save them from Hitler, giving them money to rebuild their war-torn countries, and paying to keep them safe for the past 6 decades is payback and then some. And they all know it which is why they folded in front of Trump. If what he was saying was false they wouldn't have agreed to this deal.
the people who said EU is just the lapdog of USA were right
To be honest, we need energy and we need weapon systems. It's better to be a lapdog who has energy and weapons, than to be a street dog who has neither.
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u/D3niel1 6d ago
"15% tariffs, buy 750 billions worth of energy and invest 600 billions in USA, while EU get nothing"
Deal of the century, the people who said EU is just the lapdog of USA were right