When you’re forced to listen to Trumpite complaints about America’s trading partners ripping off the US, one grievance in particular routinely emerges: US roads and garages are full of Volkswagens, Hyundais and Toyotas, but the rest of the world won’t buy American cars.
Europe is the main target of this outrage, and the old statistic gets another airing that the EU imposes a 10 per cent tariff on autos from the US, four times the 2.5 per cent the latter charges on cars from Europe. In reality it’s the US’s own long-standing auto protectionism that has fostered an inward-looking and globally uncompetitive industry and one now falling behind in the electric vehicle (EV) revolution. Donald Trump’s utterly absurd 25 per cent tariff on cars and car parts shows he has learnt the wrong lesson.
To address that well-worn talking point: the EU import duty on standard cars such as hatchbacks and minivans is indeed 10 per cent versus the US’s 2.5 per cent. But the US production of light trucks, including pick-ups, has long sheltered behind a 25 per cent tariff wall. The duty is known as the “chicken tax” after Lyndon B Johnson imposed it in 1964 in retaliation for European levies on American poultry.