Overdrive Extra

Jack Roberts

Are cheaper trucks on the horizon?

| July 03, 2013

download (1)I was flipping through the latest issue of Car & Driver on the plane Monday on my way up to Chicago to test-drive and International 9900i tractor when I ran across an excellent article entitled Free-Trade Cars by Justin Berkowitz. The full article is HERE, if you’re interested, and very much worth a look if you’re one the multitudes of fleet professionals fretting about the never-ending price hikes affecting new truck purchases today.

The gist of the article is this:

President Obama’s administration is currently in serious talks with the European Union (EU) about implementing a trade-free agreement that could have significantly drive down new truck costs.

According to Berkowitz, the United States today charges a tariff of 25 percent for pickup trucks and commercial vans imported into the United States. Likewise, the EU charges a flat rate of 10 percent on imported automobiles (the U.S. tariff for imports is 2.5 percent of the vehicle price.) Eradicating that tariff, particularly for trucks, would be a huge boost to the U.S. truck market, opening the doors for whole new crops of compact trucks and vans, as well as larger vehicles such as the Volkswagen Amarok. I reached out to Berkowitz via Twitter and asked if the negotiations and any agreement would include heavy-duty trucks as well, and he seemed to think they would be. So, assuming the EU and the U.S. align their respective vehicle regulations, truck prices could drop considerably and new markets for American-made vehicles could suddenly open up in fell swoop.

Even more intriguing, Berowitz notes, such an agreement could spur a rash of new plant construction – and corresponding jobs – here in the States. BMW, Mercedes-Benz and VW all say they would consider building more plants here in the U.S. if they were able to export those vehicles to sell in Europe without having to pay a 10 percent import duty.

Negotiations start in earnest next week on these issues. And it’s one the trucking industry in general ought to keep a close eye on.

  • roge160

    And then the govt. would hit us with a new tax like the 2290 witch is total crap.

  • Jackie

    It’s thinking like this that has us in the problems today,I watching the lifting the tariff’s 35 years ago,and flooding our markets with SH*T products,from every dam country in the world,thus putting the America out of work,and forcing us to but SH*T that engineered to break made in CHINA and Pakistan and any other dam country but ours, This is just another business scam,short and sweet,next year is election time for the congress take a trip off and vote,you can’t afford not to,park the DAM THING, YA a day off might ever get the congress even to pay attention,NA I SORTA DOUGHT IT, THE COUNTRY IS RAN BY IDIOTS,AND IF YOU HAVEN’T NOTICED YOU MUST BE A STEERING WHEEL POLTICIAN!

  • Craig Vecellio

    I don’t buy the claim of boosting U.S. jobs. Are they saying that without the tariffs, the U.S. would be the cheap labor compared to EU? They claim they would build plants here in the States to export to EU if they don’t have to pay the 10% charged by the EU. Why then, is the 25% tariff to export to the States not encouraging new plants here in the States to avoid the tariff? I see the opposite happening. The U.S. would be giving up the greater tariff, thereby reducing the cost of manufacturing and shipping to the U.S. from the EU. If anything, it would encourage GM, Ford, and Chrysler to begin building in the EU and shipping from there to the U.S. Apparently Obama doesn’t think the current takeover of the U.S. economy by China is progressing fast enough on its’ own.

  • bobmigs

    the us pickup market is dominated by ford and gm because of the tariff and you want to hand away that market #1 and #2 selling vehicle ins the US for what ? the promise of maybe factories and the guarantee that all those dollars would be going overseas even if plants were built here further widening our export deficit

  • John Scott

    With governments so in need of revenue. I am sure the tax will just move to something else. Plus when you really figure in the savings by eliminating the tariffs. Its not going to significantly drop the price. Look how much Obama and his EPA have affected big truck prices with emissions? Adding thousands of dollars to the price of a large commercial truck.

  • CRSSRDS

    As much as I may dislike Osama and all he stands for, I have to say that the fedaral EPA has by far taken a back seat to Californica in emission regs. The manufacturers and their customers are all kowtowing to CA. By the end of this year my 53′ van will be illegal in only CA. My old tractor will be illegal only in CA in another couple of years.

    As for any new tariff agreements, you can forget any savings. The US dollar against foreign currencies is in a downward spiral and could deteriorate to a tail spin at any moment. Cheaper trucks? Only in dreams.

  • Bryan

    Who does this benefit? Not the American people. That only reduces the American made, forces more out sourcing, less tax revenue, and more money going out of the country. New jobs? I highly doubt it. If he wants to drop the prices to boost the economy, raise the tariffs, and make the US a friendlier place to do business, instead of putting a strangle hold on the companies of this country…

  • martymarsh

    Anything these large corporations do has nothing to do with the buyer, they look for the cheapest way to manufacture them and then sell them for the most they can get out of them. If the consumer happens to benefit in the process, which is rare, hurray for us, but it’s not likely.
    As far as the corrupt government doing anything positive, everything they do is positive if you go along with tax and spend, these creatures are out of hand, and I don’t care what side your on.
    Look at all the money this country would have if we quit buying friends.
    Although I got a little out of hand here, it’s hard to take anything serious anymore when you know who causes all of the problems.
    In my way of thinking, government is not the answer, they are the problem. Just look at all of the unnecessary truck regulations.

  • His & Hers Transport

    One doesn’t even have to take a trip off to vote. We can vote absentee. The biggest problem is that, most of the time there isn’t much difference between those on the ballot, limiting our choices to the lesser of two evils, every election cycle, which is still evil by the way. Until all Americans demand better politicians, those who really believe in less government and will vow to shrink it, not make it bigger and more intrusive, we will continue this slide to serfdom.