Trump threatens 20 percent tariff on European Union cars

Gladys Abbott
June 22, 2018

The move is a response to new United States tariffs imposed on European Union steel and aluminium by President Donald Trump.

Donald Trump has threatened a 20% tariff on all European cars if the EU does not remove trade barriers introduced on Friday.

European Union countries retaliatory trade tariffs on a list of U.S. products, agreed in response to United States tariff hikes on steel and aluminium imports from Canada, the EU, and Mexico, will come into force on Friday, the European Commission announced on Wednesday.

The European Union has imposed additional tariffs of 25% on products such as motorcycles, orange juice, bourbon, peanut butter, cigarettes and denim - part of its response to the Trump administration's tariffs on steel and aluminum exports from Europe. "However, the unilateral and unjustified decision of the United States to impose steel and aluminium tariffs on the EU means that we are left with no other choice", EU Trade Commissioner Cecilia Malmstrom said.

The EU has also filed a case contesting the legality of the US tariffs with the World Trade Organization.

American tariffs on steel and aluminum have also hit Canada, Mexico, India, Turkey and India.

Trump imposed tariffs of 25 per cent on European Union steel and 10 per cent on aluminum on June 1.

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The European Union this week triggered the first phase of retaliation against the U.S. over its metal-import tariffs imposed on national-security grounds, making good on more than three months of threats to hit American goods with tit-for-tat levies.

Some of the products chosen are created to target the states controlled by Republicans, who are seeking to retain control of both chambers of Congress in November elections. Cohn contradicts Trump on trade Cohn contradicts Trump on trade deficits The Hill's Morning Report - Can the economy help Republicans buck political history in 2018?

"Changes in trade policy could cause us to have to question the outlook", Federal Reserve Chairman Jerome Powell said during a panel discussion at a European Central Bank conference in Sintra, Portugal. "The logic of that is what companies throughout the country are feeling".

American companies had US$627 billion in assets and US$482 billion in sales in China in 2015, compared with just US$167 billion in U.S. assets and US$26 billion in USA sales for Chinese companies, according to a report published on Tuesday by China International Capital Corp analysts Liu Liu and Liang Hong.

"We did not want to be in this position".

One thing that may cause Beijing to hold back from a full-scale attack on American companies is concern about the impact it would have on the domestic economy.

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