Mercedes Has An Ingenious Tariff Strategy For Trump That’s Equitably Favorable For Those Already Dominating | Carscoops

      Mercedes chief Ola Kallenius has a suggestion for EU lawmakers aimed at pleasing Trump, but the calculations may favor Europe.

      Recently, Mercedes proposed that EU lawmakers permit the duty-free import of American cars. The company's leader expresses optimism regarding the potential for a favorable trade agreement between Europe and the US. However, it remains uncertain whether such a deal would persuade more European consumers to purchase American vehicles.

      European car manufacturers have faced scrutiny from President Donald Trump since he resumed his presidency. Trump argues that the limited sales of US-made cars in Europe are unjust and believes that tariffs could help balance these trade disparities, which have already begun to impact European auto brands. Yet, negotiations are ongoing, and Mercedes-Benz feels it has a viable solution.

      Kallenius has put forth the idea that European lawmakers consider allowing the duty-free import of US vehicles in exchange for tariff exemptions on EU-made cars sent to the US.

      “For every car exported from the USA or Europe, a car from the opposite side could enter duty-free,” he proposed, as reported by Reuters. “We have presented this idea to both parties, and it could be a viable element of the negotiations between the USA and the EU.”

      Kallenius mentioned that while Mercedes is sharing ideas for potential trade changes, discussions are still being conducted at the EU level.

      "As a company, we engage with political leaders – both in the EU and in China and the U.S.,” he stated. “However, negotiations occur at the EU level because trade policy is within the EU’s jurisdiction. We are here to provide feedback, offer ideas, and illustrate how certain decisions might impact us.”

      Regarding the potential for more American cars in Europe, it’s important to note that historically, American vehicles have not achieved significant success in Europe, particularly in comparison to European cars in the US. While Trump may view this as inequitable, various factors contribute to it. A major reason is that fuel prices in Europe are substantially higher, often three to four times more expensive than in the US, which severely diminishes the attractiveness of fuel-inefficient American vehicles.

      Moreover, the size of American cars, particularly pickup trucks, tends to be greater than those in Europe. While they are well-suited for US roads, European cities typically feature narrower roads.

      The statistics illustrate the situation. According to the BBC, 692,334 vehicles manufactured in the EU were exported to the US in 2022, while only 116,207 US-built vehicles were sold in Europe. Thus, it is clear that there is a significant disparity, and it’s evident who would gain the most if tariffs were eliminated on both ends.