The Register Citizen (Torrington, CT)
European car imports face new tariff threats
President Donald Trump said he plans to impose a 20 percent tariff on all cars imported from the European Union unless the trade bloc “soon” removes import duties and other barriers to U.S. goods, escalating global trade tensions.
“Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump said in a tweet on Friday.
Volkswagen AG, Daimler AG and BMW AG each fell in Frankfurt.
Trump’s tweet came hours after the EU imposed tariffs on about $3.3 billion of American products in response to his barriers to imported aluminum and steel.
The European tariffs target politically resonant products, including 25 percent duties on Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey. The EU measures cover a total of around 200 categories in total, also including various types of corn, rice, orange juice, cigarettes, cigars, t-shirts, cosmetics, boats and steel.
Trump’s tweet threatens to broaden a trade war that he’s already sparked with China. The U.S. has pledged to impose 25 percent tariffs on $34 billion in Chinese goods on July 6, and China vowed to retaliate in the same amount of U.S. imports.
The U.S. may justify the auto tariffs on the grounds of national defense, just as it did in March when imposing duties on global imports of steel and aluminum. Trump initially exempted the EU from the metal tariffs, but let the temporary reprieve expire after negotiations with the Europeans fell apart.
America’s Ambassador to Germany Ric Grenell is in Washington this week seeking a deal on auto levies.
He spoke to White House trade adviser Peter Navarro, Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin about reducing existing tariffs on cars shipped between the U.S. and Europe to zero. There’s support in the administration and from German carmakers for such an idea, but no agreement has been reached yet.
Many lawmakers have been critical of Trump’s use of the trade law, which was rarely used before he took office. Ross during a Senate hearing on Wednesday faced heated questions from GOP lawmakers who argued there was no merit to claiming auto imports threaten the country’s defense capabilities.