We use cookies to help improve and maintain our site. More information.
close

June 08, 2018

German car lobby in full panic mode - wants EU to cut car tariffs unilaterally

We have been predicting for some time that the truce within the EU's on its position towards Donald Trump is unlikely to survive the real world of lobbying. This morning FAZ has the story that the German car industry wants the EU to cut the import tariffs on US cars unilaterally, in order to appease Trump. The first thing that struck us about the story is the apparent ignorance about WTO trade rules. You can't just cut the tariffs for US cars. You are not allowed to discriminate. The EU now has carefully crafted trade agreements with South Korea and Japan, where the lifting of car tariffs has been agreed to be gradual. Do we really think that Emmanuel Macron and a Lega/Five Star administration are going to say yes to the German car lobby?

We also doubt that a unilateral cut in the tariffs would work. The euro's is undervalued against the dollar as a result of the ECB's policies. The US is not going to export many more cars to the EU as a result of such a tariff shift. 

And the proposal misreads the thinking of Trump. He does not use the threat of tariffs as a tool to reduce his trading partners'  tariffs. That would be a hard-nosed pro-free-trade strategy. Trump wants the tariffs. There may be an economic cost, as trade economists keep pointing out. But for so long as the US economy is performing well, the political risks to Trump are very small. Protectionism is not the result of a failure to understand trade economics, or some irrational act. It is a calculation that the symbolic act of slapping trade tariffs on certain foreign goods and the resulting fall in their US sales will bring domestic political benefits. Can we really be sure that Trump is miscalculating?

The EU currently levies a 10% tariff on car imports, compared to a 2.5% tariff levied by the US. The German car lobby wants to equalise the tariffs. They argue that millions of German jobs depend on the car industry, which is why the EU must act. 

FAZ is making an interesting additional observation. The reason why the EU is unlikely to agree a unilateral cut in import tariffs is the fear of a flood of imports from China, India and Brasil. Under the EU-Japan trade agreement, the EU's import tariff on cars will be cut from 10% to zero over a period of seven years. What the Germans are asking for is an immediate and unilateral cut.

Show Comments Write a Comment

June 08, 2018

Turkey suspends migrant deal with Greece

Turkey suspended its bilateral migrant re-admission deal with Greece in response to a decision by a Greek court to release eight former Turkish soldiers who fled the country a day after the July 2016 coup attempt, according to Hürriyet Daily News. Greece will now no longer be able to send back Syrian refugees to Turkey. The agreement with Greece is the legal backbone of the migrant deal between Turkey and the EU. However, there are also those who argue that the two deals are separate mechanisms and halting the deal with Greece will not affect the deal with the EU. It certainly will add confusion to what we still consider a terrible deal.

The rise in tensions between Turkey and Greece also got the Turkish Navy to send one frigate, two gunboats and an underwater attack team to be on alert in the Aegean sea.

Show Comments Write a Comment

June 08, 2018

Is Macron losing the left?

Emmanuel Macron lost support on the left and gained on the right, according to the latest poll for Les Échos. The Elabe poll shows that Macron's popularity, while overall stable at 41%, fell among supporters of all political parties including his own, with the exception of the right: supporters of François Fillon who have confidence in Macron rose by 4pp to 55%, while he lost 12pp among Socialists and radical-left supporters. The percentage of those who have no confidence in the president rose from 50% to 64%, and that of those who have absolutely no confidence in him from 3% to 27%. 

Macron may well risk a permanent break with the left, warns the president of the Elabe polling institute. The continued strike actions and the fall in the popularity of Nicolas Hulot, environment minister and the government's most popular left figure, have contributed to this trend as well. The debate about cutting the costs for social services will only accelerate it.

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.

 

Recent News

  • May 28, 2018
  • A no-confidence motion that could backfire
  • The political repercussions of a historic referendum in Ireland
  • Why the lack of an international role for the euro matters
  • May 10, 2017
  • PSOE primary campaign in full swing
  • Czech government crisis escalates
  • Backroom dealing on electoral reform in Italy
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • April 09, 2019
  • What can go wrong now?
  • April 13, 2018
  • German support for eurozone reform next to zero...
  • ... and no support for France on Syria either
  • A French sermon
  • Why the euro endures
  • April 19, 2017
  • Shadows of money
  • Breppe Grillo vs Eurointelligence
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • January 29, 2019
  • What comes after plan B fails? Plan C, of course. C for cliff-edge
  • Gilets jaunes, how to structure a movement in free flow?
  • European Court of Auditors criticises Juncker’s investment fund
  • February 26, 2018
  • Angela Merkel's cabinet
  • March 27, 2017
  • Governing formation troubles - Northern Ireland edition
  • Did Trump present Merkel with a bill for Nato?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • November 13, 2018
  • Peak Salvini?
  • Protest uberisation
  • January 05, 2018
  • Catalonia's government by Skype
  • The case for EEA membership
  • February 28, 2017
  • Is Hamon losing the right wing of his party?
  • Something we just don’t understand
  • Solve the problem
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • May 31, 2019
  • Salvini’s frightening strength
  • The significance of Corbyn’s latest flipflop on the referendum
  • August 20, 2018
  • ... and a subtle shift in EU policies towards both Russia and Turkey
  • Nothing to celebrate about the end of the bailout programme
  • Support for Brexit holding up
  • November 09, 2017
  • From street protests to road closures
  • What Russia wants
  • January 31, 2017
  • Project fear against Italexit
  • On how not to frustrate Brexit
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • February 07, 2019
  • Forget Tusk - the real action is elsewhere
  • On David Malpass and the Trump legacy
  • May 28, 2018
  • A no-confidence motion that could backfire
  • The political repercussions of a historic referendum in Ireland
  • Why the lack of an international role for the euro matters
  • September 15, 2017
  • Juncker dragged into the Catalan fray
  • What to say in Florence
  • How to fill the gap left by the British MEPs
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • April 26, 2019
  • How Brexit has given rise to different perceptions of reality
  • The EP, not Madrid, will boost Spanish clout
  • How realistic is a Gaullist Europe?
  • September 17, 2018
  • About the new partnership between Russia and China
  • EU ponders Irish backstop protocol to help May
  • February 07, 2018
  • A short note on bitcoin
  • July 04, 2017
  • On the CDU’s programme
  • Macron defines his presidential style
  • Why do we criticise modern macro?
  • November 28, 2016
  • And now what Monsieur Fillion?
  • The inescapable logic of an interim agreement
  • On Germany's foreign policy post-Trump
  • How to lose against the populists
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • April 01, 2019
  • Meaningful IV
  • Caputová elected: a turning point for central Europe?
  • October 02, 2018
  • Whatever it takes - diesel version
  • Is Macron's European discourse too simplistic?
  • April 06, 2018
  • Schleswig Holstein collapses Spain's strategy against Catalan separatism
  • On the implausibility of conspiracy theories in the Skripal case
  • October 09, 2017
  • UK is starting to prepare for a no-deal Brexit
  • Why Germany will resist meaningful eurozone reform
  • April 12, 2017
  • Macro in a state of denial
  • Where Schulz is vulnerable
  • Schäuble’s three party tricks
  • October 17, 2016
  • Ceta is dead for now
  • L’après-Hollande, c'est Hollande
  • SPD against Russia sanctions
  • Nissan to join customs union and other fanciful tales
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • June 18, 2019
  • Retaliation threats over drilling
  • February 04, 2019
  • Watch out for the resurgence in Tory unity
  • The gilets-jaunes' effect on the European elections
  • What did he possibly mean by that?
  • September 27, 2018
  • Two ways out of the Brexit impasse
  • May 22, 2018
  • A €60bn ESM credit line - is this what they call a backstop?
  • Will Nato survive Trump?
  • Northern Ireland's Brexit disillusion
  • Would Corbyn become prime minister if he accepted the single market?
  • January 15, 2018
  • Is the section on Europe for real?
  • Can Drahos upset Zeman?
  • September 11, 2017
  • Turkey issues travel warning for visitors to Germany
  • How nasty is the AfD?
  • May 08, 2017
  • A message of hope
  • Barnier's not so easily agreed Brexit principles
  • The rebirth of the paranoid conspiracy theory
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • August 24, 2016
  • Towards a hard Brexit
  • Is there a pact of Ventotene?
  • La rentrée
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • June 03, 2019
  • Reinventing the French right without Wauquiez
  • Tory leadership election is between feasible and unfeasible Brexit options
  • May 07, 2019
  • … while Macron’s European troubles have already begun, and might get even worse
  • Don't discount a Brexit deal
  • Is Tsipras too complacent?
  • Costa - the fiscally responsible Socialist
  • April 11, 2019
  • Thoughts on how the European elections in the UK could affect UK and European politics
  • Far right to enter Estonia's government
  • March 18, 2019
  • May's deal still on the table. Don't rule it out.
  • EPP decision on Fidesz still open
  • On the defeat of liberalism
  • February 21, 2019
  • Sound and fury, but Brexit reality unchanged
  • Supertanker Deutschland moves to join internet age
  • January 29, 2019
  • What comes after plan B fails? Plan C, of course. C for cliff-edge
  • Gilets jaunes, how to structure a movement in free flow?
  • European Court of Auditors criticises Juncker’s investment fund
  • January 09, 2019
  • Trump downgrades EU's diplomatic status, threatens trade war
  • December 21, 2018
  • Not just Brexit makes 2019 a year of EU uncertainty
  • Sentiment is fickle, especially about sentiment
  • Father Christmas - French edition
  • King suspends Michel's resignation
  • EP has objections to the withdrawal treaty
  • Let's break the law
  • December 03, 2018
  • French protests coming to a head this week
  • The Galileo fiasco, an ill omen for the future UK-EU relationship
  • November 15, 2018
  • Ratification is more probable than it appears
  • Romania's problematic presidency
  • October 29, 2018
  • Why the EEA is no longer a Brexit option
  • Behold the rising superpower: post-catholic Ireland’s European miracle
  • October 12, 2018
  • A deal so close, and yet so far
  • AfD leaves Germans speachless and helpless
  • September 27, 2018
  • Two ways out of the Brexit impasse
  • September 13, 2018
  • Bravo Mr Juncker for raising the issue of the euro’s international role. But what now?
  • Are the eurosceptics imploding?
  • August 31, 2018
  • How Macron uses the new European divisions at home
  • Macron's eurozone budget is probably a no-go
  • EU edging closer to a Brexit deal
  • August 20, 2018
  • ... and a subtle shift in EU policies towards both Russia and Turkey
  • Nothing to celebrate about the end of the bailout programme
  • Support for Brexit holding up
  • August 03, 2018
  • What we think about reforming the eurozone
  • July 25, 2018
  • Future of euro debate: can the ECB do the heavy lifting?
  • July 16, 2018
  • How to think about the three Brexit options
  • How to respond to Trump
  • July 09, 2018
  • German panic about Target2
  • AfD level with SPD
  • How the EU could fail
  • July 02, 2018
  • Is Trump out to destroy both Nato and the EU?
  • Salvini’s empire
  • Remembrance as a way forward?
  • June 26, 2018
  • Could the Irish border issue trigger a no-deal Brexit?
  • Is Harley-Davidson's decision really a victory for the EU?
  • June 22, 2018
  • Why a fearless Italy is so dangerous for the EU
  • June 18, 2018
  • Some thoughts on the future of Europe
  • The end of Spanish income moderation?
  • June 13, 2018
  • Macedonia - a deal hailed internationally and challenged at home
  • Macron - elusive to the left
  • What did Theresa May concede?
  • June 11, 2018
  • The end of the G7 - good riddance
  • Macron needs allies for his European agenda
  • Who is going to be the next director-general of the Italian treasury?