Trump threatens to slap 20 percent tariff on cars from EU

Trump threatens to slap 20 percent tariff on cars from EU

Trump threatens to slap 20 percent tariff on cars from EU

The European Union slapped revenge tariffs on iconic US products including bourbon, jeans and motorcycles on Friday (June 22) in its opening salvo in a trade war with US President Donald Trump.

Asked last week how she would react if Trump went through with his plan to impose tariffs on European Union auto exports, German Chancellor Angela Merkel said in an interview: "First we are trying to see if we can prevent that from happening - but I can't predict this, so I don't want to raise any false hopes.

Trump has repeatedly singled out German automotive imports to the U.S. for criticism.

The move against China could raise prices for American consumers and businesses and hit global supply chains for industries like carmakers and electronics.[ nL4N1TO1AX] Chinese reprisals have hit American farmers already.

He has previously expressed his distain at German luxury brands, particularly Mercedes-Benz, and its prominence in New York's Fifth Avenue.

In the US, Trump has launched an investigation into whether vehicle and automotive parts imports are hindering the sector's ability to compete globally. The new tariffs will go into affect August 4. Tariffs for those materials now stand at 25% in a move to protect local producers. It is a $241 million measure that matches the amount of steel and aluminum import duty expected to be collected from India by the United States after the Trump administration imposed the measures earlier this year. Beijing has vowed to immediately retaliate with its own tariffs on USA soybeans and other farm products.

German vehicle makers employ more than 36,000 workers in the U.S. Another 80,000 work for American suppliers, according to German auto industry group VDA. Most imports come from Asia, but several European brands, including Land Rover, don't have USA factories.

Lim said: "This is going to escalate, with the United States especially looking at German cars".

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

Cohn said he understand Trump's rationale, but added that restricting vehicles to ones made in the U.S.is not realistic. He charged that a succession of poorly negotiated accords - including the North American Free Trade Agreement and the pact that admitted China into the World Trade Organization - put American manufacturers at an unfair disadvantage and destroyed millions of U.S. factory jobs. However, he gave temporary exemptions to a handful of countries, including Canada, Mexico, and the European Union trading bloc.

"We oppose the act of extreme pressure and blackmail by swinging the big stick of trade protectionism", a spokesman for China's Commerce Ministry said Thursday. Most of the units imported from Germany are premium cars, which tells a lot about the position of American auto industry in the premium market.

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