Donald Trump threatens 20% tariff on all European cars

Trade war

President Trump on Friday said "Republicans should stop wasting their time on immigration" reform. India and Turkey have already targeted US products, ranging from rice to autos to sunscreen.

Daniel Gros, director for Economy and Finance at the Centre for European Policy Studies, said that in a trade war everyone stands to lose, but the U.S. has put itself in a worse position. Duties at this level could be expected roughly to reduce USA imports of vehicle and auto parts in half.

"You're already going to see prices going up incrementally as a result of the steel and aluminium tariffs in the auto sector", said Lusk, whose group represents foreign-branded auto dealers in the US.

It is hard for the White House to unilaterally impose tariffs without input from Congress, but Trump has found several ways to do it this year.

Brussels first drew up the list in March when Trump initially floated the 25% tariffs on steel imports and 10% on aluminium, which also target Canada, Mexico and other close allies.

In the US, Trump has launched an investigation into whether vehicle and automotive parts imports are hindering the sector's ability to compete globally. "EU manufacturers do not only import vehicles into the U.S. They also have a major manufacturing footprint there, providing significant local employment and generating tax revenue", Jonnaert said in a statement.

The president's latest Twitter post claims the USA will impose a 20-percent tariff penalty on European imports if the EU's own tariffs and barriers on United States goods are not "soon broken down and removed".

He pledged to impose tariffs on imports from countries that Trump said had exploited the United States.

Trump's trade policies have also escalated conflict with Canada and Mexico as he seeks to renegotiate the $1.1 trillion North American Free Trade Agreement on terms more favorable to Washington. Thus, while Trump can and likely will hit Europe where it hurts, the European Union has already largely exhausted its very limited ability to retaliate against America.

Trump has threatened to levy a 25 percent tariff on goods coming in from China, where the Buick Envision, Volvo S60 Inscription and S90, and Cadillac CT6 plug-in hybrid are made. Trump said he would then retaliate against any counterpunch from Beijing by targeting an additional $200 billion in Chinese products, and then yet another $200 billion if China refused to back down.

That means the EU's 10 percent tax on USA auto imports and the 2.5 tariff on auto imports in the US would end.

As at Monday, there were 20,000 exclusion requests on steel duties with nearly 1,800 objections posted, and 2,500 aluminium filings with about 50 objections posted.

US Commerce Secretary Wilbur Ross assured the congressional panel that there has been "no decision" made about whether to recommend tariffs. This would also dramatically harm the revenue stream of European manufactures while also negatively impacting the salves of American owned auto dealerships who trade exclusively in European vehicles.

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