Trump threatens EU auto industry over bloc’s trade war retaliation

Trump threatens EU auto industry over bloc’s trade war retaliation

WASHINGTON
Trump threatens EU auto industry over bloc’s trade war retaliation

U.S. President Donald Trump on March 3 threatened a tax on cars from the European Union if it enacts retaliatory measures in response to his announced plans for tariffs on imported steel and aluminum.

“If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S.”, Trump tweeted.

“They make it impossible for our cars [and more] to sell there,” he added, slamming what he called a “big trade imbalance.”    

Earlier, he had blamed the US’s “very stupid” trade deals for, according to him, an $800 billion annual trade deficit.

On March 2, European Commission chief Jean-Claude Juncker said the EU was drawing up measures against leading US brands such as Levi’s and Harley-Davidson, after Trump sparked global uproar by announcing plans for tariffs on steel and aluminum, then describing trade wars as “good, and easy to win.”    

“We will not sit idly when European industry and jobs are threatened,” Juncker said on the sidelines of a conference in Hamburg, Germany.

The EU’s response matches similar moves during a 2003 “steel war” unleashed by George W. Bush’s administration - which prompted he U.S. to back down before the EU carried out its threat.

An advocate of “Made in America,” Trump has been a harsh critic of his predecessors’ trade agreements, which he says have taken millions of jobs away from the U.S.

Trump has already repeatedly accused the EU of impeding U.S. imports and threatened customs taxes on European manufacturers, particularly Germany and its high-end brands.

But German vehicles represent only a small part - 7.9 per cent - of the US automobile market, according to the German auto industry association (VDA), with German manufacturers producing 803,000 vehicles in the US itself in 2017.

Most foreign auto manufacturers selling vehicles in America have some form of production operations in the US

.Australia warned on March 4 against tit-for-tat retaliation and the outbreak of a trade war that could slow global economic growth, as it pushed to be excluded from Trump’s steel and aluminum tariffs.

Canberra has sought to be exempt from the hefty tariffs, citing an understanding reached with the United States at G-20 meetings last year.

There are also local industry concerns that the tariffs could see cheap steel destined for the U.S. flood the domestic market instead.

“We’ve seen... over the last 48 hours commentary from Canada, from the European Union. We’ve seen the US government going back about tariffs on cars,” Trade Minister Steve Ciobo told Sky News Australia on March 4.

Trump, tariffs, trade war, European Union, retaliation, auto