European Union ready to retaliate as Trump threatens 20pc tariff on cars

European Union ready to retaliate as Trump threatens 20pc tariff on cars

European Union ready to retaliate as Trump threatens 20pc tariff on cars

"Based on the Tariffs and Trade Barriers long placed on the US 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 US Build them here!"

An internal European Union memo obtained by Bloomberg disputed President Trump's conclusion that the European Union should be punished because of unfair trade practices. With the high tariffs on steel and aluminum, the European Union was left with no other choice but to retaliate in a similar manner.

The shares prices, belonging to the automobile giants like Volkswagen, Porsche, BMW, and Daimler have encountered a dive of around 1%.

The US followed a similar process for the steel and aluminium industry, which led it to impose tariffs on the foreign metals this spring. Tariffs have been imposed on products such as bourbon whiskey, motorcycles and orange juice.

Trump's latest salvo against the European auto manufacturing industry threatens to broaden a trade war he's already sparked with China.

Currently, the United States charges just 2.5% on vehicle imports; this is lower than the EU's 10% and China's 25%, although the latter will lower its tariff to 15% from 1 July.

"The tariffs, if they materialize, would call into question the business case for many niche models we now sell in the United States". Of those, just over half were exported by German vehicle makers.

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The administration is now examining whether imports of cars and trucks pose a threat to national security, using the same law that it employed to slap tariffs on steel and aluminum imports.

Mr Trump yesterday slammed the decision as "an excuse".

Convertible sales already are dwindling in the US, according to figures compiled by LMC Automotive.

European automakers including Volkswagen and BMW have major factories in America, for example, and their exports to Europe would be harmed by new EU tariffs. The announcement came a month after his administration began investigations on whether auto imports were a threat to national security.

U.S. Commerce Secretary Wilbur Ross said on Thursday the department aimed to wrap up the probe by late July or August. 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.

The dominant player in the heavyweight U.S. motorcycle market said on Monday that it would shift some USA production overseas as the retaliatory tariffs could cost it up to US$100 million (S$136 million) per year.

Mr Trump's tariff rhetoric further undermines a USA auto market already in its second year of decline after record sales in 2016, said Cody Lusk, president of the American International Automobile Dealers Association.

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