We view the 20% Vat sales tax charged by EU countries as if they were Tariffs. The Vat Tax was imposed to fund the expansion of Europe’s public rail system to encourage tourism. This has been accomplished and the Vat Taxes in Europe should be lowered.
Germany charges a 10% Tariff on US Cars and the US charges 2% on European Cars. Trump wants to equalize these to achieve reciprocal tariffs. If Trump imposes a 10% Tariff on cars made in Germany, they may be able to get their Tariff to match at 2%. BMW has suggested that the 10% Tariff on US cars should be lowered to 2.5%.
The only thing the US makes that Germans might want is the trucks. Knocking off 8% will increase sales of German cars in the US. The best deal is making German cars in the US to grab the savings from a 15% Corporate tax.
German cars are not the most popular cars in the US because of price. Japanese cars by Toyota and Honda lead the pack followed by South Korean cars in the US. Offering a 15% Corporate Tax to foreign companies to add plants in the US to be staffed by US citizens creates a middle class job source.
Trump prefers lower Tariffs and is giving countries incentives to lower their Tariffs on US export goods. This simply levels the playing field to allow citizens of other countries a chance to buy US cars if they want to. This is also meant to give US companies the incentive to improve their goods, so that people will buy these goods.
Norb Leahy, Dunwoody GA Tea Party Leader
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