European Union slaps tariffs on United States as trade war erupts
- Author: Tracy Klein Jun 24, 2018,
Jun 24, 2018, 16:51
German automakers are reportedly poised to support ending all vehicle tariffs between Europe and the U.S. To be sure, BMW, Mercedes and Volkswagen all operate U.S. plants. "The woes the administration is inflicting on Chinese companies do not simply translate into boons for USA enterprises and the US economy".
The list of US imports worth 2.8 billion euros (3.24 billion USA dollars), which will now face an extra duty at the European Union border, includes steel and aluminum products, agricultural goods and a combination of various other products. However, oil prices retreated from the multi-month peaks later and are now consolidating with looming worries over the possibility of China imposing tariffs on USA crude oil as well as the outcome of OPEC bi-annual meeting.
According to people familiar with the deliberations, US Ambassador to Germany Richard Grenell has met with executives at major German automakers, including BMW, Volkswagen and Daimler, to discuss Trump's threat of tariffs.
President Donald Trump on Friday threatened in a tweet to unilaterally impose a 20 percent tariff on all automobile imports from Europe, further breaking from Republicans in Congress and front-running an investigation he had ordered from the Commerce Department into whether these imports harm national security.
"This is what we are doing on climate change or on nuclear weapons in Iran", Juncker said.
The EU's tariffs are not the first retaliation in the escalating global trade war started by the Trump administration: Mexico and China have already launched retaliatory tariffs of their own, while Canada and Japan are soon likely to follow suit. But President Trump on Friday indicated he is aiming specifically at auto imports from Europe.
He is threatening to impose another national security-based tariff on imports of cars, lorries and vehicle parts.
The U.S. Chamber of Commerce said U.S. auto production had doubled over the past decade, and said tariffs "would deal a staggering blow to the very industry it purports to protect and would threaten to ignite a global trade war".
The Washington trade association for BMW, Daimler and Volkswagen's operations in the U.S. warned consumers will be harmed by higher tariffs.
The EU tariffs came into force just a week after China accused the United States of starting a trade war. BMW has a big plant in Spartanburg, South Carolina, and Mercedes-Benz has a factory in Tuscaloosa County, Alabama.
An increase in tariffs on European cars would be "terrible" for German manufacturers in particular, Evercore ISI auto analyst Arndt Ellinghorst wrote Friday.
The majority of USA goods targeted by the European Union, such as tobacco, Harley Davidson motorcycles, cranberries and peanut butter, will now carry a tariff of 25%. Recent G-7 meeting held in Quebec City Canada, to negotiate Trump's stance on punitive tariffs resulted in a fiasco for all democrat leaders.
China can sources oil and energy products from other countries like Russian Federation and Saudi even though they had to pay more.
Trump's ire may be directed at a 10 percent import tariff on American cars sold in those countries. Volkswagen imports all of its luxury brands - Audi, Porsche, Bentley and Bugatti.