Trump threatens 20 percent tariff on European Union cars

Trump threatens 20 percent tariff on European Union cars

Trump threatens 20 percent tariff on European Union cars

US President Donald Trump has renewed his threat to European vehicle manufacturers importing cars into America, threatening 20% import tax on cars entering the US from the EU.

"If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!"

The European Commission formally adopted a law putting in place the duties on €2.8 billion (S$4.4 billion) worth of USA goods, including steel and aluminium products, farm produce such as sweetcorn and peanuts, bourbon, jeans and motorcycles.

Most economists say the outcome of higher worldwide import tariffs will drive up costs for consumers, offsetting much of the benefit of protecting domestic industries for the country imposing them. Germany is the largest European manufacturer of automobiles, though Germany companies have a huge presence in the United States, with large factories in SC and Tennessee.

The EU trade commissioner acknowledged that it had targeted some iconic American items to increase political pressure on the US President and senior US politicians. "We don't want to do anything that would harm consumers", he said on Thursday. In 2017, 17.2m vehicles were sold in the United States, compared with 15.6m in the EU and European Free Trade Association countries.

The EU's retaliatory tariffs against the USA came into force this morning, affecting products such as bourbon whiskey, jeans, motorbikes and orange juice.

Its duties target goods worth $3.3bn (£2.5bn) after the United States imposed tariffs on the bloc's steel and aluminium.

EU Trade Commissioner Cecilia Malmstrom said this week that the 28-nation bloc was "left with no other choice" but to impose tariffs of its own after the "unilateral and unjustified decision of the U.S.".

The total amount of United States goods exported to China amounted to only US$130 billion (S$177 billion) previous year, meaning that Mr Trump's potential tariffs on US$250 billion or more of Chinese imports can not be matched, at least directly.

Trump imposed tariffs of 25 per cent on European Union steel and 10 per cent on aluminum on June 1.

Blue jeans may be among the products that will be hit by retaliatory tariffs announced by the European Union against the United States. But, he said, the move could hurt India's economic growth as the country diversifies its exports, as well as prompt India "to re-look at US relations as undependable".

Japanese vehicle makers accounted for 92,000 jobs in the US, according to the Japanese Auto Manufacturers Association's annual report.

Trump's tweet on autos came after EU reprisals against his tariffs on European steel and aluminum. The new tariffs will go into affect August 4. Administration officials have said China should strengthen protections for US companies' intellectual property, and reduce tariffs on USA products.

The biggest exporters of cars to the US are Canada and Mexico, followed by Japan and Germany.

Mr Trump ran for the presidency on a vow to topple seven decades of American policy that had favoured ever-freer trade among nations.

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