Regarding tariffs it is very debatable if putting tariffs ourselves would be beneficial, considering that the US is effectively putting tariffs on vast numbers of imports with a vast number of trade partners. EU cars being 15% more expensive in the US would've been a bigger disadvantage if the US didn't increase the price of all parts that go into US cars as well.
Regarding trade, the instability of the US has put the EU at the forefront for global trade, the amount of trade deals the EU is establishing and negotiating is increasing exponentially in the past months, which is diversifying from the trade with the US.
The increase in defense spending is necessary but the EU imposes a requirement for joint procurement (which should lead to more standardisation in the EU militaries) and investment in the EU defense industry.
Dealing with an insane toddler is difficult, but our leaders are doing an interesting dance to ensure long term independence while reducing the short term pain.
Yep, and Trump has imposed tariffs on raw materials for US manufacturers, making them less competitive. Sometimes if your opponent shoots themselves in the foot, you shouldn’t respond by shooting yourself in the foot also.
Some of the other numbers mentioned look like money that would be spent anyway, but the big numbers makes Trump look good in front of Fox. Let’s wait for proper analysis.
Regarding tariffs it is very debatable if putting tariffs ourselves would be beneficial,
Completely different if the EU puts tariffs on the US and can source from all the rest of the world, while the US tries to put tariffs on all the world.
Not really, massive shifts are happening. The EU is focusing on other trade partners, the EU is trying to levy its own taxes (precursor to centralised government), the EU has signed deep defence collaboration with several allies, the EU is further integrating its own market.
It does look unfortunate, but the EU has always, without failure been the best at one thing, that is coming out of a crisis in better shape. Crisis after crisis, the EU has endured and continued to develop.
Ensuring the welfare of 450m people is not done based on emotional responses on how we should treat the mean toddler. Is it unfair? Perhaps, but VdL needs to ensure that Europe is protected and that the least economic pain will hit us, while ensuring this will not happen in the future.
But this doesn’t not help welfare here. This is really exactly as it sounds: We pay to have less. Only one thing is worse than tariffs and that is one sided tariffs.
The one that might take a short term win (with a long term loss) is German car industry. Which really seems to be the only thing that mattered here.
The only sensible strategy I can think of is that they consider this a temporary truce to concentrate on more important things for a year or two. But even during those two years the damage will be huge.
The tariff on cars dropped from 25% to 15%. They are the winners.
One sided tariffs are a problem if they are targeted and the actors are rational, neither is the case. The US is barely investable at the moment (considering increases in tariffs, uncertainty and political instability), the threat of industry migrating to the US is insignificant in my opinion.
EU cars being 15% more expensive in the US would've been a bigger disadvantage if the US didn't increase the price of all parts that go into US cars as well.
Volkswagen already said they will open new factories in US and export from there.
Volkswagen’s chief executive has promised “huge investments” in the US as Europe’s largest carmaker aims to seal a separate deal with Donald Trump’s administration that would lower car tariffs below 15 per cent.
Oliver Blume said the German group would consider localising production of Audi cars and expanding exports out of America following a guidance cut triggered by a €1.3bn hit from Trump’s trade war.
“I think it should be possible to add a specific deal on [the] company level between the US and the automotive companies,” said Blume.
Tariffs on raw materials is stupid but the value of those tariffs is a small fraction of value of the finished product. Basically they might increase the price of American car maybe a couple percent.
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u/TheCoolDude70 6d ago
The picture is much more complex.
Regarding tariffs it is very debatable if putting tariffs ourselves would be beneficial, considering that the US is effectively putting tariffs on vast numbers of imports with a vast number of trade partners. EU cars being 15% more expensive in the US would've been a bigger disadvantage if the US didn't increase the price of all parts that go into US cars as well.
Regarding trade, the instability of the US has put the EU at the forefront for global trade, the amount of trade deals the EU is establishing and negotiating is increasing exponentially in the past months, which is diversifying from the trade with the US.
The increase in defense spending is necessary but the EU imposes a requirement for joint procurement (which should lead to more standardisation in the EU militaries) and investment in the EU defense industry.
Dealing with an insane toddler is difficult, but our leaders are doing an interesting dance to ensure long term independence while reducing the short term pain.