Trump Steps Up Tariff Rhetoric To Europe

President Donald Trump on Friday threatened to escalate a trade war with Europe by imposing a 20 percent tariff on all US imports of European Union-assembled cars, a month after the administration launched an investigation into whether auto imports pose a national security threat.

“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 wrote on Twitter on Friday.

Trump’s tweet on autos came after EU reprisals against his tariffs on European steel and aluminum. The EU targeted more than US$3 billion in American goods exported to the 28-member European Union.

The United States currently imposes a 2.5 percent tariff on imported passenger cars from the European Union and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported US cars.

German automakers Volkswagen, Daimler and BMW build vehicles at plants in the United States. Industry data shows that German automakers build more vehicles in southern US states that voted for Trump in the 2016 presidential election than they ship to the United States from Germany.

The US Commerce Department is investigating whether imports of automobiles and auto parts pose a risk to national security. Two days of public comments have been scheduled in July, and Commerce Secretary Wilbur Ross said on Thursday that the department aims to wrap up the probe by late July or August.

Tariffs on car imports would add to an array of trade wars Trump has started, saying he aims to create US jobs and protect domestic industries.

Trump has threatened duties on up to US$450 billion of imports from China. Administration officials have said China should strengthen protections for US companies’ intellectual property, and reduce tariffs on US products.

The move against China could raise prices for American consumers and businesses and hit global supply chains for industries like carmakers and electronics. Chinese reprisals have hit American farmers already.

Trump’s trade policies have also escalated conflict with Canada and Mexico as he seeks to renegotiate the US$1.1 trillion North American Free Trade Agreement on terms more favorable to Washington.

German automakers did not comment on Trump’s tweet. (Reuters)