Why Do Eurpeans have 60 MPG Cars and not USA?

Because American's won't buy tiny diesel city cars that do 0-60 in an afternoon, particularly when diesel costs more than gasoline and is not as widely available. Europe is a different market than the U.S.

Europe isn't crawling with giant SUVs that make little diesel cars deathtraps in collisions, either. When you're on the road at 60 mph and have a Tahoe on your tail and a Hummer in front of you, do you really want to be in an econobox? I speak from experience, having been the middle guy in a 5-car Interstate pileup, where I was between a full-size pickup and a station wagon. My little Saturn coupe was demolished; everybody else drove off afterward.

Between collision standards, emission standards and the tastes of the average consumer it just does not work out. Cars like Smart just don't sell well in the US. There is a class of transportation vehicles for sale in the US that can meet these standards for fuel economy but they are not allowed to go over 25 mph and are pretty much limited to in town driving. They are called LSV's (http://en.wikipedia.org/wiki/Low_Speed_Vehicle), these can be bought and used in the US by the way.

USA has the strictest emissions standards and the highest safety standards in the world; much higher than those required in Europe.

Safety equipment = added weight.

Added weight = lower mpg.

our emissions laws are much different. All the extra equipment tha tmakes a car pass the smog tests also impact performance.

Fuel is cheap in America, there is no need for the extra engineering because there is no major demand

Gas in Europe is so expensive compare with the U.S.