European Union warns Trump that auto tariffs could lead to $300B retaliation

Donald Trump

Donald Trump

President Donald Trump's trade policy could cost New Jersey companies $920 million in sales, according to a report by the nation's largest business lobby.

Using a state-by-state analysis, it argues that Mr Trump is risking a global trade war that will hit the wallets of U.S. consumers.

The comparison is particularly painful to Europeans, which are attempting to forge common ground with the Trump administration on the idea that the real danger to fair trade is China.

By any measure of protectionism, the U.S. maintains one of the most open trade policies of any country in the world.

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.

"No, no, no, no", he said, noting that more tariffs could be imposed if there is no deal with China.

The bloc exported 37.4 billion euros (US$43.6 billion) of cars to the United States in 2017, while 6.2 billion euros worth of cars went the other way. The tariff which will apply to parts imported from China - circuit boards and "associated components" eg pretty much all of the electrical components many manufacturers in the USA use to source their parts will come into force on July 6th, as part of a wider set of tariffs including those from the EU.

President Trump has long threatened to place tariffs on China, arguing that the country steals the intellectual property of tech companies in the US and as a result should be punished.

"Despite Trump's bluster, trade wars should not be invited and are never easy to win", said Pascrell, a member of the House Ways and Means Committee, which oversees trade issues.

In addition, the submissin suggested that these roles would be placed under pressure if a tariff raise had the predicted negative impact on supply of vehicles and parts from the EU.

Retaliation for his tariffs came swiftly.

The impact of retaliatory measures by Washington's trading partners could total around $294 billion - or around 19 percent of total USA exports in 2017, the European Union estimates.

Harley-Davidson, which dominates the heavyweight United States motorcycle market, subsequently announced it would shift some USA production overseas to avoid higher costs for European Union customers.

The Chamber based its state-by-state analysis on data from the US Department of Commerce and government agencies in China, the EU, Mexico, and Canada.

Trump, however, has repeatedly defended his position, criticizing the European Union, Canada, and China on trade both during the Fox interview and at a recent rally in SC, where Trump went as far as to declare the United States the "piggybank" other nations like to take from.

The EU regards national security arguments as nonsense: In its report, the European Commission warned the United States government that the move would be unacceptable.

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