The trade war between the U.S. and Europe could negatively affect car enthusiasts worldwide, warns U.S.-based auto exporter West Coast Shipping. While aimed at new car manufacturers, the trade war is one that classic car buyers and even used car buyers can fall victim to, the company said in a news release.
Classic cars are traded on a global scale by dealers, auctions and private collectors. Low import duties on classics, plus low ocean shipping rates allow easy overseas purchases. With more than 35,000 classic cars exported from the U.S, each year in containers, the U.S. is one of the largest sources.
The proposed import duty of 25 per cent will be met with a reciprocal 25 per cent in Europe, resulting in collectors on both sides of the Atlantic seeing less demand for their cars.
An even bigger problem looms for modern used cars, according to the release.
Data providers Piers report that used U.S. car exports in the 2017 outnumbered imports by four to one. In this market the U.S. has a huge trade advantage for a number of reasons: Americans tend to lease their cars and Europeans tend to own them. When leases are up overseas buyers purchase many of the used cars, driving up demand, increasing residual values, and essentially subsidizing the U.S. auto lease market.
The inclusion of used cars in a trade war will reverse the positive export advantage and could spike U.S. car lease rates, the release said.
Another approach by German automakers proposes to abolish import duties on vehicle imports between the EU and the U.S., which would be a win-win for both sides, according to West Coast Shipping.
