Comment by rich_sasha
7 days ago
Well, they are saying, EU market is harder to operate in (because everyone pays VAT) than the US market (no VAT, also lower regulatory barriers it seems), and also EU firms have a "home advantage" benefit, for example the regulation is written for their benefit.
So US is easy to sell in for everyone, EU is "hard" to sell in for everyone, but maybe less so for EU car makers. So there is something to this argument, it's not entirely without merit.
Additionally, US car tariff used to be 2.5%, whereas EUs is 10%. The imbalance is short in justification, though across the board, EU and US charge each other similar tariff amounts altogether, so there are other areas where the US charges more.
Whether that justifies broad brush enormous tariffs in everything, and whether US does the same in other industries (defence for example) is an exercise I leave for the trader.
> EU market is harder to operate in (because everyone pays VAT)
Surely it's not exactly rocket-science to handle VAT...
Explain how it's an disadvantage for an US exporter compared to a domestic company... Give an example instead of handwaving. I'm willing to admit I don't understand all the details, but you wont convince me using this vague statement: "harder to operate in (because everyone pays VAT)" ...
If the US adjusted selected tariffs to protect selected industries the outcry wouldn't be the same, so I'm not very interested in specific examples where the US have a lower tariff than the "counterpart".
> So US is easy to sell in for everyone, EU is "hard" to sell in for everyone, but maybe less so for EU car makers. So there is something to this argument, it's not entirely without merit.
It's completely without merit. Do you really think US regulation isn't written for the benefit of US companies? It is!
From my post:
> [...] US does the same in other industries
As it happens, automotive regulation in Europe is far stricter than the US ones (emissions and pedestrian safety come to mind).
Not the point I was making.
In any event US cars don’t sell in Europe for a range of reasons including size and fuel consumption. Those stricter rules apply to everyone and I don’t think it’s beyond US manufacturers to meet those rules for cars sold in European markets.
If you’re saying that Europe should loosen its safety rules just so the US can export more cars then the answer will certainly be no.
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