Comment by wkat4242
7 days ago
> My only hope is that this is part of some grand bargain where other countries reduce theirs on US goods and things reach a more balanced equilibrium.
The thing is that we don't. That 39% Trump claims Europe is levying on US goods? It doesn't exist. I've heard they include VAT in this which makes no sense because it applies to all goods including those made locally. That is not a trade tariff. It's just internal taxation.
However I've also heard they calculated it with the trade deficit (which in itself makes no sense, it's not a tariff) but in the case of the EU that makes even less sense as Trump always quotes the deficit on goods, but ignores the deficit on services (eg IT) which is highly in favour of the US.
Also when I hear people say "they don't buy American cars in Europe", we do have American brands like Ford and Tesla. Ford just sell smaller models designed for our market here. Those big SUVs and pickups are not suitable for our traffic or environment.
The average effective tariffs on US imports to the EU are 2.7%, whereas for EU imports to the US they are 2.2% (i.e. weighting the various tariff rates by their respective trade volume). So there is a minor imbalance, but imposing 20% (and claiming 39%) is ridiculous.
I agree that if it was part of a grand bargain it wouldn't be so large, which makes me think its either just an insane opening play or it's being used to change how the US funds itself (the second part of my response)