Published: Tue, July 03, 2018
Money | By Armando Alvarado

EU Warns US Against Car Tariffs

EU Warns US Against Car Tariffs

Retaliation for his tariffs came swiftly.

Bartiromo asked President Trump if the USA should be banding with allies like the European Union to try to "stop China from stealing from" the U.S.

The escalating protectionist attitude we're seeing is prompting China and the European Union to warn if things get worse, this could lead to a global recession.

The report claims that tariffs would wreak havoc on cross-border supply chains in the automotive industry, risking higher costs for American industry, damaging exports and jobs, and pushing up prices for consumers.

The EU now has a 10% levy on U.S. vehicles compared to 2.5% for cars entering the United States.

Past year the European Union exported $43.6 billion worth of cars to the United States.

It reported that manufacturers were "overwhelmingly" concerned about the impact of the tariffs imposed by the Trump administration on products including steel and aluminium. This weekend, Ottawa imposed tariffs on U.S. goods worth around $12.6 billion.

The commission said "up to $294bn (£223bn) of United States exports. could be subject to countermeasures" that would be considered by the European Union and other trading partners, which amounts to nearly a fifth of the total value of U.S. exports in 2017. As with steel and aluminum, "national security" would be the justification.

According to a report in the Financial Times, a letter sent by the European Commission to the US Department of Commerce says the EU could hit $300 billion - the equivalent of well over R4 trillion - of US goods with tariffs, if Trump follows through on his threats to place big taxes on European vehicles being imported in the US.

Wife of Capital Gazette victim remembers his dedication to journalism
One reporter described the scene as a "war zone", and a photographer said he jumped over a dead colleague and fled for his life. On his presidential Boeing 747, Trump called Thursday's quintuple murder at the Annapolis Capital Gazette's offices 'terrible'.

Trump's views on tariffs have been a sore subject, even among fellow Republicans who have criticized Trump's imposition of steep tariffs against US allies.

"Economic analysis confirms that an increased tariff on these products will be harmful first and foremost for the United States economy", said the letter, seen by AFP on Monday.

Trump's Republicans are fighting to retain control of Congress in November midterm elections.

Mr. Trump's administration wants Germany - which would be hardest hit by automotive tariffs - to pressure the European Union to come to an agreement.

European Council President Donald Tusk, Chinese Premier Li Keqiang and EU Commission President Jean-Claude Juncker attend a signing ceremony during a EU-China Summit in Brussels, Belgium June 2, 2017.

When Trump tried to say Monday that it's not a big deal if the trade dispute with the European Union continues, Dutch Prime Minister Mark Rutte literally laughed in his face.

It also underscores China's new boldness in trying to seize leadership amid divisions between the United States and its European, Canadian and Japanese allies over issues including free trade, climate change and foreign policy.

Mr. Trump is unlikely to be moved by economic arguments or relevant statistics. "It was never comfortable with the West being one bloc", said a European official involved in EU-China diplomacy.

Trump initially granted Canada, EU members and other nations exemptions on the metal tariffs - 25% on steel and 10% on aluminum.

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