Trump threatens to slap 20 percent tariff on cars from EU

Muriel Colon
June 22, 2018

But the threat to slap heavy tariffs on imported cars and parts in the name of USA national security faces a barrage of opposition, with everyone from heads of state and Republican lawmakers to average Americans weighing in on the plan.

It's worthing noting that, before Trump triggered a trade war, US exports to the European Union faced an average tariff of just 3 percent; America's domestic carmakers were already highly profitable; and most major foreign automakers operate large plants in the United States.

The tariffs are based on Section 232 of the 1962 U.S. Trade Expansion Act, which allows safeguards on national security grounds. "Our response will have to be proportionate, reasonable and intelligent".

She called the European Union response proportionate and in line with World Trade Organization rules and said that they would be removed if Washington removed its metal tariffs.

However, China accused the USA of an act of "extreme pressure and blackmail" and said it would respond with "strong countermeasures".

Mexico imposed tariffs on American products ranging from steel to pork and bourbon two weeks ago. The US has imposed tariffs on Canada, Mexico and £25bn in Chinese goods.

The EU trade commissioner, Cecilia Malmström, said this week 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 US". "They do have, though, very strong Immigration Laws", Trump posted on Twitter, a day after a vote on a compromise immigration measure was postponed in the House.

President Donald Trump has fueled trade war fears by pledging to impose tariffs of 20pc on imports of European Union cars if trade barriers are not "broken down".

The EU retaliatory tariffs will initially target a list of U.S. goods worth 2.8 billion euros (3.24 billion dollars), most of which will be hit with import duties of 25 per cent. The deadline for completing the investigation is February, 2019, but Commerce Secretary Wilbur Ross said Thursday said the department aims to wrap up the probe much earlier, by late July or August.

Trump has repeatedly singled out German auto imports to the United States for criticism and reportedly told French President Emmanuel Macron he wanted to halt Mercedes-Benz models from driving down Fifth Avenue in New York City.

Trump threatened additional taxes on European cars if the EU chose to retaliate.

Although a large portion of the US's most popular auto models, including those from foreign brands (such as the upcoming BMW X7), are already manufactured within its borders, many are imported from other countries.

The biggest exporters of cars to the USA are Canada and Mexico, followed by Japan and Germany. 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 USA relations as undependable".

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