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November 22, 2018 | Volkswagen, BMW, and Daimler Seek White House Meeting

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
German auto industry executives are so afraid of Trump’s tariff threat that they seek a meeting with the president.

Please consider German Car Bosses Willing to Attend White House Meeting.

The heads of Volkswagen, BMW, and Daimler are ready to attend a meeting at the White House with the Trump administration, but have not yet received a formal invitation, industry sources said on Thursday.

The Handelsblatt newspaper on Wednesday cited industry and diplomatic sources as saying the meeting could possibly take place as soon as next week. The paper said it was not known whether U.S. President Donald Trump would attend the meeting.

“It’s clear that the meeting is planned, and that the CEOs will attend,” said one industry source.

A German government spokesman said the chancellery was familiar with the idea of such a meeting, but said European Union officials were responsible for all trade negotiations.

One industry source said the invitation put the companies in an awkward position, given the EU’s responsibility for trade matters. At the same time, they did not want to turn down the opportunity to engage in dialogue.

Trump’s Car Obsession

These companies cannot speak on behalf of the EU but clearly they want to dissuade Trump from more tariffs.

Axios investigates Trump’s Car Obsession

Trump is as jazzed as ever about hitting foreign-made cars with steep tariffs. Just about every member of his senior economic team besides Peter Navarro believes this is a terrible idea. But they haven’t swayed him.

“Trump says gleefully that the moment he started talking about maybe tariffs on cars, that [European Commission President Jean-Claude] Juncker got on the fastest plane known to mankind, comes straight over to Washington and starts offering deals,” a senior European official told me. “This tells Trump that car tariffs is real leverage.”

But, but: The Europeans haven’t made any serious concessions to the Americans, and Trump is bound to get frustrated as the talks sputter on. Trump’s lead trade negotiator, Robert Lighthizer, hasn’t yet persuaded the Europeans to open their markets to U.S. agricultural products.

European officials walked away from their conversations with Trump at the UN General Assembly meeting with the impression that he was fixated on auto tariffs and unhappy about America’s trade deficit with the EU.

Juncker’s Proposal

Juncker actually proposed ending EU tariffs on cars if Trump would do the same.

The EU has a 10% tariff on small cars vs 2.5% in the US but Trump turned down the deal.

Why?

Trump fails to note that the US has a 25% tax on light trucks.

Is Trump a hypocrite? Yes! He does not want a free trade agreement with the EU that covers all cars and trucks, just cars.

But it was not Juncker’s place to offer such a deal. All 27 nations in the EU have to agree to trade deals.

Yes, that’s absurd. And it is why Trump will not get the EU to abolish agricultural tariffs. France will never agree.

Stupidity Threats

So, we remain exactly where we were when Trump met Juncker last July:

I can be stupid as well,” said Juncker to Trump.

Indeed!

Trump bragged last summer about a deal with Juncker. There was no deal. All Trump did was postpone a car tariff decision until December.

Time is up.

Mike “Mish” Shedlock

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November 22nd, 2018

Posted In: Mish Talk

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