Trump import tariffs on Chinese goods will heavily impact Moog

Gladys Abbott
July 2, 2018

"We have right now a 2.5% tariff on all cars that come in and if you're an European Union vehicle seller you figure this into your business strategy, okay, we're selling to the USA - we have this relatively minor tariff, 2.5% to deal with, if that was to increase tenfold, it's gonna be a huge problem", said global trade expert Alex Lawson.

It added that the countermeasures on £294bn of USA goods that would be considered by the European Union and other trading partners amounted to nearly a fifth of the total value of U.S. exports in 2017.

The submission said that tariffs on cars and vehicle parts could undermine US auto production by imposing higher costs on USA manufacturers.

Mr Trump has already imposed heavy tariffs on European steel and aluminium imports, provoking retaliation in the form of tariffs on US.

Assuming counter-measures along the lines of those taken in response to existing U.S. import tariffs on steel and aluminium, up to US$294 billion of USA exports - 19% of overall United States exports - could be affected, the submission said.

The letter also said that the link between the automotive industry and national security was "weak".

The name of this reported bill is the "United States Fair and Reciprocal Tariff Act"-or "FART".

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The European Union says that for some goods, such as trucks, USA import duties are higher.

The bloc exported 37.4 billion euros (US$43.6 billion) of cars to the United States in 2017, while 6.2 billion euros worth of cars went the other way.

Trump recently turned his attention to the automotive sector, focusing on European manufacturers.

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.

He did, however, double down Sunday.

Roughly half of the circuit boards Moog use in their instruments come from China, Moog say that they do try to source their boards from the United States where possible, but it results in roughly 30% higher costs, so its not possible to source exclusively domestically.

In this context, Trump presumably alluded to his belief that European carmakers are taking away business from American manufacturers.

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