They're offering to eliminate tariffs on vehicles imported from the U.S. in exchange for the U.S. eliminating tariffs on vehicles imported from Europe. The U.S. has a 25% tariff on light trucks and SUVs. Because of that tariffs pickups and SUVs are the most profitable lines for GM, Ford, and Dodge. So profitable, in fact, that U.S. automakers are cutting back on car lines in favor of light trucks and SUVs. Remove the tariff and the Big Three take a substantial hit to their bottom lines. Will Detroit sit still for that?
If you go and examine the European vehicle industry, you will come to three conclusions with the truck/SUV situation:
1. The only two companies with any real truck production are VW and Mercedes (the Mercedes is some ultra high-cost truck, way beyond what most Americans would pay. The VW ‘Caddy’, I think, if there were no tariff existing....might interest a fair number of folks (more of a truck-van, than a real truck).
2. There is a wide-range of SUVs made by Volvo, BMW, Mercedes, Opel, Audi, etc. Presently, with the dollar-exchange rate and the tariff existing....they are all extremely expensive. On quality status? I think they all would be welcomed by the American consumer. The cost factor? It makes the discussion worthless.
3. Finally, we end back with the question of Detroit, and if the big-three can really compete. Back in the 1980....I would have said no. Times have changed to some degree, but I doubt that they’d agree to dump the 25-percent tariff on truck/SUV imports. Trump might have to force them into the corner.