Germany and France have jointly stated that they will alter their own corporate tax rates in defiance of Trump lowering the US rate to 21%. Currently, Germany’s average rate is about 38-39%, and roughly 33% in France. Turkey, Russia, the UK, and Switzerland all fall below the new US rate. So why would Germany and France really care? Spain, Italy, Canada, Australia, The Netherlands, China, South Korea and Indonesia are already below the rates imposed by France and Germany. So what’s the big deal about the US lowering it’s rate?
Its a false perception. Its news. Its media bias. And it creates divisiveness.
The EU, albeit Germany and France, are also screaming bloody bull because Trump has stated he is imposing tariffs on imports of steel and aluminum. But the US only imports 3% of it’s steel from Germany, most imported steel comes from Canada, Brazil, South Korea, Mexico, Russia, Turkey and Japan.
According to the Economic Policy Institute, “surging steel imports put up to half a million US jobs at risk.” With Trump promoting infrastructure spending, there needed to be in place some barriers that would force companies to buy American. During the Obama administration steel imports doubled. Since 2000, US aluminum production has dropped 77%, and the world market share has dropped from 16% to less than 2%. During the Obama administration imports rose roughly 80%. By contrast, China’s production has gone from 11% to 53% and they represent the largest world producer.
Making America ‘competitive’ seems to go against the European model.
Opinions from Germany’s DW suggest that Trump is simply being ‘unfair’. How dare Trump put the American people before Europeans! Ranting on, the columnist declares that Trump is ‘anti-globalist’ and only cares about the US… He then attacks the American steelmakers for not switching their focus to more specialized high-value steel. Again, why would Germany be so bent out of shape over a commodity that only represents 3% of all imported steel to the US?
Germany’s ‘slowest growing export is steel’ according to WETx.
The retaliation proposed by Merkel is set to include tariffs on blue jeans, bourbon and Harley motorcycles. The EU is claiming that by Trump imposing these tariff measures on two items, steel and aluminum, he will be responsible for all EU countries retaliating… Interesting. So, retaliation is not their fault? If I steal your motorcycle and then you steal my car – are you not responsible for anything? It is a strange ethic to denounce the US and Trump because we are focusing on ourselves instead of them.
Germany represents only 7.9% of US exports and only 5.5% of the US imports. The European Union accounts for 54-58% respectively of Germany’s trade. Trade with the US is not substantial. Trump’s tariffs did not target the biggest exports of the EU, they targeted China. Had Trump wanted to hit Germany, he would have imposed tariffs on Germany’s largest exports: automobiles and machinery. He didn’t.
The largest importer of US Bourbon is Canada. The world’s largest exporter of jeans is China. The largest exporter of motorcycles is China, followed by Japan, Germany, India, and Italy. Harley Davidson has already been largely impacted by Japanese manufacturing. Their biggest market remains in the US, with the international market representing roughly 38% of sales including; China, India, Africa, Middle East, EU, and South America. They have been aggressively pursuing smaller bikes to accommodate a changing demographic, however the main motorcycle markets in the EU remain to be Vespa, Honda, Ride, Derby and KTM. The ‘total’ US market share of all motorcycles in the EU was 2.9% in 2011.
So why would Germany target these particular markets?
Maybe because Merkel felt obliged to give the appearance she was going to respond to the big meany Trump so as to continue the media promotion that he’s a big, bad meany guy who only cares about Americans and not Germans…
Or maybe all the rhetoric coming out of the EU is simply BLATHER.
One phone call from Barack Obama and Merkel is on it.