France And Germany Clash Over US Car Tariffs

With several weeks remaining until steel and aluminum tariffs introduced a few weeks ago by the Trump administration take effect, the US and its largest trading partners are mired in behind-the-scenes negotiations to strike a deal that could win them an exemption from some or all of the tariffs.

And while recent leaks have focused primarily on the talks between Treasury Secretary Steven Mnuchin,Trade Representative Robert Lighthizer and Chinese economy czar Liu He, Bloomberg today reported that there's a growing rift between Germany and France regarding how they should respond to the US tariffs.

Germany is willing to offer the US some concessions to protect its export-led economy; however, other EU members - including France - believe the bloc should offer no concessions. The EU is still trying to work out a common response to the Trump tariffs.

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At stake is a trade relationship worth some $640 billion in 2016. Germany is in favor of any EU deal covering new rules on tariffs for a series of products including cars, machinery, foodstuffs and pharmaceuticals. That stance is not shared by France, which wants to focus on pressuring China over issues such as subsidies and overcapacity in the steel industry.

Chancellor Angela Merkel and her government are already feeling out the German car industry and whether they might be able to convince it to support a reduction to the EU's 10% tariff on auto imports. Carmakers reportedly responded positively to the idea.

"Dialogue with the US must continue at the highest political level," the VDA German car industry body said in a statement when asked about the report. "We advocate sustainable and reliable agreements that are WTO-compliant. In the interests of fair and free trade, it is necessary to dismantle each other’s trade barriers and to agree a new framework."

German Economy Minister Peter Altmaier, who met last week with US Commerce Secretary Wilbur Ross, recently told reporters that he hadn't made an offer. He later denied reports that he pitched lowering auto tariffs.

"It is only the EU which negotiates, united and together. I have neither made any offers nor any promises," he said. A spokeswoman for his ministry added that he had kept EU Trade Commissioner Cecilia Malmstrom fully informed on the discussions.

Trump spoke on Tuesday with both Merkel and French President Emmanuel Macron, according to separate statements from the White House. Trump and Merkel discussed joining forces to counter China. Macron reminded Trump that European steel and aluminum exports are not a security threat to the US. Trump has largely predicated his protectionist push on national security concerns.

Merkel is trying to persuade Trump to give up on forging bilateral agreements with each European state and instead agree to common EU guidelines in accordance with WTO rules. Under those rules, countries can only offer concessions that lower trade barriers below the WTO standard if the reduction covers "substantially all" commerce - not individual products and sectors. The average EU tariff on US imports is around 3%, while the US average duty is around 2.4%.

Comments

infotechsailor Zero Point Wed, 03/28/2018 - 04:26 Permalink

Merkel was just about to give trump the finger when, he grabbed her by the pussy and told her he was going to tax her soon to be shithole country's German cars. Oops, found her weak spot. This is why trump was elected. To punch below the belt to win back some of these trade imbalances. To quote Victoria nuland when she couldn't convince her EU counterparts to help the US shadow operations to overthrow the government of Ukraine: "f-ck the EU!!". 

In reply to by Zero Point

just the tip giovanni_f Wed, 03/28/2018 - 08:01 Permalink

having growth potential is not growth.  russia, as vast a country as it is, is in size only.  their population is five times the state of texas, yet generates 3/4 the GDP of the state of texas.  take away their arms industry and oil and what have you got?  ok.  the US.  but i digress.  looking at the populations of russia and the US mid 60s, they were comparable, about 200 million plus each.  since that time the US is about 320 million plus, depending on how many illegals are in country on a given day.  the population of russia will be less than 150 million by 2030.  and that is even with the muzzies contributing to population growth in russia.  for all the talk about russia russia russia, i have never understood why vladivostok has not said "seeya" and gone their own way.  oh, yeah, the red fleet.  forgot about that.

In reply to by giovanni_f

Analyse2 kralizec Wed, 03/28/2018 - 15:46 Permalink

Ah, the French surrender jokes! Usual since 2013 and the Iraq war ...

Fortunately for the US the "monkeys" didn’t surrender at Chesapeake and Yorktown! The USA wouldn’t exist then … Without the fighting “frogs” you would still be kissing the Queen's ass sweetheart ... but for some Americans puffed up with pride, it is so painful to accept that they owe their independence to the French !

In reply to by kralizec

Enrabard giovanni_f Wed, 03/28/2018 - 11:40 Permalink

Where? Because of Belt and Road? In far future maybe? This is a heartland country. It had never any advantage in commerce. It was always lacking commerce mindset. Look at Russia. There is no free market there - it's mafia run economy - same as ukrainian. You have a partial capitalism in China only - there you won't be killed on street just because somebody didn't like your face lol Russia is a jungle - people doesn't have any trust to each other, they have same socialist thinking as all east Europe after soviet brainwash. How to make a legit business in a place like this LOL Most of richest Russians doesn't even want to live there... and these who does, live in their castles and caste underworld bubble in Moscow... This is still a f*g 3rd world...  

In reply to by giovanni_f

GUS100CORRINA infotechsailor Wed, 03/28/2018 - 04:36 Permalink

Speaking of TRADE DEFICITS, the MARKETS look like they are headed for a DEFICIT if things continue trading as they currently are trading.

NUMBER TO WATCH ON THE S&P500: 2588 give or take a couple of points.

JFK-TRUMP ANALOG looks to be in play as well as other market analogs like S&P 1929, S&P 1987 and Nikkei 1990. The correlation with these analogs is very high.

In reply to by infotechsailor

GUS100CORRINA Adolph.H. Wed, 03/28/2018 - 04:30 Permalink

France And Germany Clash Over US Car Tariffs

My response: All of the countries of the world have been using Tariffs since the turn of the century. In many cases, America has been taken to the cleaners. 

As President TRUMP stated: America needs and demands fair and reciprocal trade.

Last time I checked, America's TRADE DEFICIT for the last 50+ years has eclipsed 20 Trillion dollars. It has been a constant wealth drain because none of the previous POTUS office holders cared or understood enough to make a difference. 

Thank GOD that President TRUMP loves America enough to deal with the issue of TRADE DEFICITS.

A lot of work needs to yet be done to clean up the TRADE DEFICIT mess.

In reply to by Adolph.H.

just the tip Adolph.H. Wed, 03/28/2018 - 07:48 Permalink

any discussion here about france is not the auto industry.  the wine industry.

the wine industry of california caught up to itself in the mid 90s.  and true to form overproduced.  they recovered in the mid 00s but now have the capacity to even export.  so what about all those grapes in france?  as french law requires a wine called "champagne" to be made using grapes from the champagne region of france, how can korbel export to france, or europe for that matter?

with the germans it may be cars, but with the french, it is their wine.  even if it says cars.

In reply to by Adolph.H.

Guentzburgh Wed, 03/28/2018 - 04:35 Permalink

Germany is the european epicentre of globalist/socialist totalitarian politics that is destroying european peoples and cultures, an oppressive country abusing its weaker neighbours in many ways, as such they are at the heart of opposition to Trump and true liberalism (not lefty fake liberalism) and freedom that protects european peoples.

Trump must break Merkel and destroy German hegemony through trade , to stem the globalist hell unleased upon europe that also heavily influences u.s. politics

 

Just like WW2 we must united Break Merkel and break Germany to achieve freedom

Enrabard Guentzburgh Wed, 03/28/2018 - 11:53 Permalink

Only time when Germany was a land of free minded people was when it was partitioned into many competing states. Only then non-centalists could rise there into power. Goethe times gave us Goethe because it was not that centralised, prussian, bloodthirty, collectivist hell like today or before the War. Now it became again a machine - machine not even run by germans anymore - but global corporations and Germans will accept that because they obey any law imposed on them - they just love obeying orders and state rules - that's their idea of wealthy nation, happiness, development, modernity - fullfiling greater plan, even not theirs LOL Look at their election they have in reality consensus based 2 party system. But two parties rules together - so it doesn't make any difference how do you vote, no party gets permission to become real leader and make a real change. One elite keeps it in check - same system of selfelection was implemented in EU. It's no better than USA.

In reply to by Guentzburgh

SmittyinLA Wed, 03/28/2018 - 04:46 Permalink

Who gives a crap, the US is the global car market, we should dictate screw job terms to the EU, take it or fuck off, they have waaay more market to lose.

We have 50 years of tariff discrimination to make up for, and when I say "we" I mean the US and Japan.

We also need to deregulate the US car industry, we should have 100 auto manufacturers not and even some without unions, no more state bolchevik dictates.

We need to put those screwed over GM engineers to work not at Uber but competing with GM and the Japanese.

snblitz SmittyinLA Wed, 03/28/2018 - 14:03 Permalink

SmittyinLA has it exactly right.  Only Americans think in terms of "fair" when it comes to trade.  Everyone else thinks in terms of "advantage".

Look at how the world and a good portion of US politicians and media are screaming over just the concept of moving to "fair."

Have the world trade policies towards the US been "fair" for the last 40 years?

https://www.finitespaces.com/2018/03/20/protectionism-vs-why-buying-locally-makes-you-wealthy/

 

In reply to by SmittyinLA

dunroamin Wed, 03/28/2018 - 06:46 Permalink

"It is only the EU which negotiates, united and together"

 

That's a big, fat lie. Merkel unilaterally invited the whole 3rd world to Europe in 2015. She followed up by making expensive and futile deals with Erdogan and then trying to impose migrant quotas on everyone. She is the self-appointed dictator of Europe.