Trade

A good example of the unfairness in tariffs can be seen with the difference between the US and Germany when it comes to auto imports. The US charges a 2.5% tax on German auto imports and Germany charges a 10% import tax plus a 19% value added tax. In the United States, the Cadillac Lyriq is available from $58,590 but customers in Germany, where the EV has just been launched, will have to pay almost $30,000 more for one. The new Trump proposal increases the US tariff to 25% but it still leaves the US in and unfair situation. Other European countries also have tariffs plus value added taxes. Almost all of the US trade partners are charging higher tariffs than the US and Trump is attempting to minimize the difference while still giving other countries the advantage. These other countries are not happy as they see Trump’s fair-trade policy as unfair to them. This is an attempt to reduce the one trillion-dollar US trade deficit. The plan is to encourage other countries to lower their tariffs which in turn will allow the US to lower tariffs and in the long run have lower tariffs for all countries.