What if Europe imposes higher tariffs on cars made in Africa?

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Within a few years, can give Europe the same phenomenon is happening in the united States. The north american country has gone from a thriving industry, and untouchable of the car to suffer the rivalry of his neighbor in the less developed south.

In a very short time several manufacturers have established car factories in Mexico, or have expanded their production capacity in the country. The neighbor of US is living a very sweet moment in which to thrive providers and local divisions. The lower labour costs are very attractive for this industry.

The north Africa begins to concentrate in the medium term a production capacity that is not to underestimate. Renault, PSA and Volkswagen have announced factories -or already have – in Morocco, Tunisia and Algeria. Are, in principle, the factories to supply the local market, but also can be exported if you expand your capacity and have more local suppliers.

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today, the Dacia Dokker and Lodgy come from there, each time with more pieces of local origin, because they benefit from a free trade zone in Tangier. PSA, for its part, can get models now are manufactured in Spain to produce them there, in exchange for the more expensive models in Vigo or Villaverde. medium-term can be a area competitor.

A solution may be the protectionism, that is to say, put more tapes to the import of models manufactured outside of the European Union, both tariff and non-tariff barriers (such as bureaucracy, paperwork, approvals, etc) Is intended to make Donald Trump with the NAFTA countries, that is to say, Mexico and Canada. The future president has announced various populist measures such as this.

According to various economists, protectionism is a measure of the effectiveness is very limited, and for the long term is useless. Trump wants to prevent manufacturers from laying off U.S. workers and to give work to the mexicans because they charge less. It would be more appropriate to offer tax incentives or grants that are not deslocalice that production. The united states is a net importer, means that buying more cars outside than it exports.

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Donald Trump wants to get out of the free trade agreements with all these countries

models that are made in Mexico, following the example, are in many cases cars or affordable low range: subcompact or compact, but also make cars more expensive as some SUV of General Motors. Imposing fees on import can shoot prices Ford Fiesta, Nissan Versa or Mazda2, for example.

Mexico could produce 1/4 of the cars sold in the US in 2020

If the united States ceases to be an interesting market for that production, the manufacturers go towards their efforts in putting these cars in other countries. In other words, would make the competition to the plants americans. It can be defined as shooting and leave the shot by the butt.

on the other hand, a protected industry relaxes its measures in order to be competitive, by which, when it disappears, protectionism, is a measure unhelpful in the face of foreign competitors. What happens with Trump can be seen in the future in the EU, although it is more complicated that the European Union adopt thesis populist as is mounted the set-up. You can access any ruling populist, but tended to band together to change the community’s policies that way.

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by 2020 there will be operating several car factories in the Maghreb, mainly to feed its demand for regional and local

which surely will occur, both with respect to Mexico, as the Maghreb, is that industry of the united States and the European Union will have to get used to that competence and improve its quality procedures and costs to keep it in position. Yes, there may be some relocation in Europe have closed dozens of factories since 2008, although only two in Spain (Linares and Barcelona).

The treaties of free trade, that loosened barriers for goods, long-term are beneficial to all parties. it is Not the fault of Mexico or the Maghreb to close factories in the more developed areas. Would have been closed also. The manufacturers always seek to produce in the most comfortable place, whether it’s Stuttgart, Detroit, Kenitra or Aguascalientes.

This industry, there is that spoiling her. There is more to see what has happened in Australia, the local industry has been condemned to dismantling in less than five years because they are no longer competitive with the asian and the domestic market is not so big, more or less like the Spanish. The car generates a lot of wealth and jobs, is a strategic sector, this arouses so many suspicions.