u.s. president trump considers 25 percent punitive tariffs on car imports from the eu. German cars would then become significantly more expensive in the USA. nor would they cost much less there than in germany, says one facebook user. Is this true??
The U.S. president has threatened the european economy several times with imposing punitive tariffs of up to 25 percent on car imports. "They send their mercedes here, but we can’t send our cars to them", the US president complains.
Markus soder criticizes impending US punitive tariffs on car imports
25 percent tariffs would put a heavy burden on the german economy, says bavarian minister-president markus soder: "german cars are not a threat to national security, but strengthen the u.s. as an automotive location." on the facebook page of BR24 the topic was heavily discussed. One user asked the question: "why are German cars offered at significantly lower prices in the USA than in europe??"
We asked the two bavarian car manufacturers BMW and audi.
sales tax on automobiles varies across the u.s
Due to different VAT rates, it is not easy to compare the prices of car models in Germany and the USA. While cars in germany are subject to a 19 percent value-added tax, the sales tax rate varies from one country to another, in the USA from state to state. Audi calculates average sales tax of 5.8 percent. In addition, there are so-called "local taxes, which vary from municipality to municipality. on average, the combined state and local sales tax rate is about 6.5 percent. (an overview of the sales tax rates in the 50 US states is provided by the NGO tax foundation).
net prices for cars in the USA and germany
Better to compare the nettolist prices. BMW and audi cars tend to be slightly cheaper in the USA. The extent of the difference depends on the model in question. a bmw330i, which will be released in march, costs the equivalent of 37$ in the USA.408 euros net, in germany it is 37.605 euros. The differences are somewhat greater for the X5 xdrive40i, which costs 53.743 euros net and 59 euros in this country.412 euros. In germany, the X5 costs around ten percent more. However, a 1:1 comparison is difficult, because the net list price is influenced by several factors, as BMW press officer emma begley says:
German cars are cheaper in the U.S. because of lower value-added taxes
Audi generally sees "no serious difference between the net list prices in the u.S. and in germany, as press spokeswoman susanne killian says. Thus, an audi A4 45 TFSI costs 36 percent in germany.848.73 euros, in the USA 42.000 dollars, which is equivalent to about 37.187 euro corresponds to (as of 19.2.). The net price of a car in the USA is therefore 0.9 percent more expensive than in Germany. When it comes to the gross price, the tables are turned because of the different VAT rates: if you calculate with 6.5 percent in the U.S. and the legally required 19 percent in Germany, the A4 costs 39% in the U.S.604 euros and in germany 43.850 euro, is ten percent cheaper in the USA.
Importing a car bought in the USA is not worthwhile
How big the price difference is always also depends on the current exchange rate. Currently, one dollar is worth about 0.88 euro. The weaker the dollar, the cheaper it is to buy a German car in the USA. In practice, importing a vehicle purchased in the USA to Germany is usually not worthwhile. Although the sales tax does not apply to immediately exported products, customs duties and import sales tax are incurred instead.
in detail it works like this: the transfer costs are added to the net price. On this sum, called the customs value, the customs duty of 10 percent is levied, and 19 percent import sales tax is then due on the resulting sum. "This rate corresponds to the value-added tax and is levied so that domestic dealers are not disadvantaged", says andre lenz, press officer at the general customs directorate. In the case of the BMW X5, which costs around 5600 euros less net in the U.S. than in Germany, the calculation would look like this:
© BR24
image rights: BR24
Because of the customs duties and the import sales tax, importing a car from the USA is not worthwhile.
The import costs therefore mean that the X5, which is sold net in the USA by more than 5.600 euro is cheaper, in the end it would be several hundred euro more expensive than an X5 bought in germany.
duty is due on large BMW X-models
The larger BMW X models are a special case because they are predominantly (X3) or. Exclusively (X4, 5, 6 and 7) are built in the USA. In order for BMW to sell these models in germany, the munich-based carmaker has to import these vehicles and also pay customs duty and import sales tax on them. BMW can deduct the import sales tax as input tax from its sales tax liability. However, the customs duty is included in the pricing, even though BMW does not want to give any further details on this for reasons of competition. Conversely, the USA levies a duty of 2.6 percent on cars imported from Germany.
Conclusion
BMW and audi cars are slightly cheaper in the u.S. than in germany. How big the price difference is depends on the model and the US state. Unlike Germany, the U.S. does not have a uniform value-added tax rate. In addition, the exchange rate between the dollar and the euro influences the price difference. Importing German cars bought in the USA to Germany is not worthwhile in the vast majority of cases, as customs duties and import sales tax are higher than the price advantage.