European Union warns USA of almost $300-billion retaliation over auto tariffs

Markets

Markets

So far, the EU has only imposed duties on $3.2 billion of USA products such as whiskey and peanut butter, as retaliation for President Trump's tariffs on imported European steel and aluminum.

In a 10-page submission to the United States Commerce Department sent last Friday, the European Union said tariffs on cars and vehicle parts were unjustifiable and did not make economic sense.

The European Union has warned President Trump that imposing import tariffs on cars would lead to counter-measures on $294bn of U.S. exports.

The EU's letter reportedly said that it has not yet decided on countermeasures to possible auto tariffs, but said it is "likely" to apply them to "a significant volume of trade" in the event Trump imposes such tariffs. The EU, which described the move as "pure protectionism", introduced duties on USA products in return, as did Mexico, Canada, Turkey and India.

As a trading partner, the European Union is "possibly as bad as China, only smaller", US President Donald Trump said in an interview with the right-wing Fox News channel on Sunday. It also said it would seek to move manufacturing of European-bound bikes outside of the US.

The document also said that European vehicle makers in the USA make about 2.9 million cars per year, accounting for 120,000 jobs directly involved in the manufacturing process, or 420,000 jobs if non-direct roles such as auto parts production and retailers are included.

The new European Union tariffs came in retaliation to U.S. taxes on imported steel and aluminum, enacted earlier this year.

The EU has retaliated to U.S. tariffs on steel and aluminium imports with duties on items like jeans and Harley Davidson motorbikes.

The European Union has reportedly threatened to retaliate against US President Donald Trump in the escalating trade conflict developing across the Atlantic.

In a letter to United States authorities, the European Commission, which handles trade policy for the bloc's 28 members, painted a stark picture of what the United States economy would face if Trump followed through on his threat.

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.

Trump said last week that the government was completing its study and suggested the United States would take action soon, having earlier threatened to impose a 20% tariff on all EU-assembled cars.

Similarly, Hyundai provided a similar forecast of how the tariffs will hurt the auto industry, saying that they will be "devastating".

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.