WASHINGTON — Anxious to avoid an all-out automotive trade war with the U.S., European Union officials and German automakers are ready to deal. And they have a straightforward proposal, too: Drop vehicle tariffs on both sides of the Atlantic.
Yet as nice and evenhanded as it sounds, it may not fly for U.S. negotiators.
Although a frequent talking point of President Donald Trump is the disparity between the EU's 10 percent tariff on imported autos and the 2.5 percent duty European cars pay to enter the U.S., American negotiators are more interested in blocking imports than boosting exports.
What's more, such an agreement probably wouldn't do much to bolster shipments of American-designed and -branded vehicles in Europe, where U.S. cars and trucks never have been popular. On the other hand, German-branded vehicles produced at transplants in the U.S. would come out nicely under the arrangement.
Experts say the Trump team is motivated by trade deficits and is more interested in getting automakers to return production to the U.S. — showing working-class supporters that the administration is creating jobs, even if critics says tariffs will end up costing more jobs overall.
"We already have zero tariffs between the U.S., Canada and Mexico on automobiles," said Chad Bown, a senior fellow at the Peterson Institute for International Economics. And the Trump administration was "not happy with fully reciprocal tariffs under NAFTA. They wanted something else. So how, if we were to do this with Europe, would that satisfy them?"