EU warns Trump: auto tariffs could lead to $300B retaliation

Ivan Schwartz
July 4, 2018

The US leader had already threatened to impose tariffs on cars imported from the European Union, in response to the bloc's retaliatory tariffs last week on popular US products including jeans, bourbon and motorcycles.

President Donald Trump issued another threat to place a tariff on EU-build vehicles coming into the U.S.

Exports threatened by new tariffs include about $842.5 million worth to China, $292 million to Mexico, $88 million to the European Union and $1.1 million to Canada, the study says.

Although Trump has previously been persuaded to back off trade threats based on the fact that they would hurt states that supported him in the 2016 presidential election, he has taken a more aggressive tack in recent months.

"We would be much more concerned here in Europe if all the volume which is not anymore able to be shipped into the United States is redirected to Europe", he told Sky's business presenter Ian King.

In the letter, BMW states the company doesn't agree with Trump's suggestion that tariffs on imported automobiles and automotive parts will help improve the United States' economic security. It won't target the 284 additions, worth $16 billion, until it gathers further public comments.

On Monday, the Chamber released a state-by-state analysis of the impacts of retaliatory tariffs enacted by Canada, China and the EU.

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Warner warned if the US were to hit Canada with auto tariffs, it would be "a real kick in the gut" to the country's economy.

Vice Premier Liu He has said privately that China is ready to set out for the first time what sectors it can open to European investment at the annual summit, expected to be attended by President Xi Jinping, China's Premier Li Keqiang and top EU officials. The initiative is also enlisting 2,000 local and state chambers of commerce to call on Congress to review the "real costs" of the tariffs, Murphy said.

Trump is preparing to impose tariffs on an additional $34 billion in Chinese imports on Friday, a move that China has promised to match.

Experts say an increase in US tariffs could pose a serious challenge to European auto-makers. He adds, "very few of the products that benefit from this policy will be exported to the U.S. China mainly sends low-end products to the U.S. or assembled products such as Apple's iPhone".

The EU in its submission said that European companies make close to 2.9 million cars in the USA, supporting 120,000 jobs - or 420,000 if cars dealerships and auto parts retailers are included, according to Reuters.

Now that they have their tax cut safely in hand, the business community has apparently gotten fed up with Donald Trump.

In its submission, the European Union said EU companies make close to 2.9 million cars in the United States, supporting 120,000 jobs - or 420,000 if cars dealerships and vehicle parts retailers are included.

Other reports by GizPress

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