EU warns Trump: auto tariffs could lead to $300B retaliation

03 July, 2018, 00:25 | Author: Lora Ball
  • Trump European Union is 'possibly as bad' as China on trade

The EU warned the Commerce Department against imposing a reciprocal 25-percent tariff on European vehicle imports due to its possible negative impact to U.S. GDP growth.

In a submission to the United States authorities, the European Commission warned: "Economic analysis confirms that an increased tariff on these products (cars and auto parts) will be harmful first and foremost for the United States economy".

According to the report, the EU exported $43.6 billion worth of cars to the USA last year, while approximately $7.2 billion worth of cars went from the United States to the European bloc.

The European Union warned the Trump administration Monday that it might slap tariffs on $300 billion of US exports in retaliation for Trump's threatened tariffs on European cars.

Experts say an increase in USA tariffs could pose a serious challenge to European auto-makers.

The company added: "It would be highly impractical to take parts for commercial vehicles created to safely transport the average US family in comfort and meet strict USA environmental and safety requirements and incorporate them in a military vehicle".

"The European Union is possibly as bad as China, only smaller", Trump said on Fox News' "Sunday Morning Futures" program.

General Motors warned Friday that new auto tariffs would undermine its ability to compete. They don't want our farm products.

More news: USA gives Disney-Fox deal antitrust approval

EU officials also said around 60-percent of US -made cars of European brands are exported into third countries, which benefits the USA economy. "They treat us very unfairly".

Its ironic that the protectionist concept of trade tariffs will essentially threaten jobs in the USA, as usual in any conflict, trade or otherwise, there is always "collateral damage".

Trump has singled out the Europeans as a problem as great to the USA on trade as China and laid out threats to fight the EU with a 20 percent duty on EU auto imports, a particular source of his scorn.

USA stocks closed higher Monday after a last-minute market rally erased the losses from a daylong slump.

The submission comes as the Commerce Department investigates automobile imports to the U.S.

The European vehicle industry in the United States supports some 120,000 jobs in its factories that are mainly in the southern region of the country.

The potential new European Union measures would apply "across sectors of the USA economy", the letter stated. On Sunday, Canada started imposing tariffs on billions of dollars of US goods in response to the Trump administration's duties on Canadian steel and aluminum.

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