> VAT can be, and is, much higher than US state/local tax.
> And this means that EU car manufacturers do see a trade advantage in terms of selling to EU...
What is never mentioned in these discussions is that high VAT means higher prices as a whole and that has a chilling effect on consumer spending. German (and all other EU) manufacturers have a disadvantage of a smaller home market. This is then compounded by having other taxes on gas (+VAT too of course), which is much more expensive than in the US. So it's simply less affordable to have a car in the EU. And as a result, a high VAT and other taxes are not a competitive advantage for any local industry. This is different to tariffs or direct support, which are an advantage.
> And this means that EU car manufacturers do see a trade advantage in terms of selling to EU...
What is never mentioned in these discussions is that high VAT means higher prices as a whole and that has a chilling effect on consumer spending. German (and all other EU) manufacturers have a disadvantage of a smaller home market. This is then compounded by having other taxes on gas (+VAT too of course), which is much more expensive than in the US. So it's simply less affordable to have a car in the EU. And as a result, a high VAT and other taxes are not a competitive advantage for any local industry. This is different to tariffs or direct support, which are an advantage.