US risks $294 bln global retaliation over auto tariffs, EU warns
The European Union warned on July 2 that up to $294 billion worth of U.S. exports would face counter-measures if President Donald Trump went through with his threat to slap duties on auto imports.
Trump has singled out the Europeans as a problem as great to the U.S. 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.
Trump’s threat was the latest salvo in an escalating trade war that saw the EU slap duties on U.S.-made jeans and Harley Davidson motorcycles in a tit-for-tat response to U.S. tariffs on European steel and aluminum exports.
In a letter to U.S. authorities, the European Commission, which handles trade policy for the bloc’s 28 members, painted a stark picture of what the U.S. economy would face if Trump followed through on his threat.
“Economic analysis confirms that an increased tariff on these products will be harmful first and foremost for the U.S. economy,” the letter said.
The commission said “up to $294 billion of U.S. exports... could be subject to countermeasures across sectors of the U.S. economy”, which was equivalent to a staggering 19 percent of total U.S. exports in 2017.
The commission also underlined that European car companies were important contributors to the U.S. economy and “well established” there.
“In 2017, U.S.-based EU companies produced close to 2.9 million automobiles, which accounted for 26 percent of total U.S. production,” it said.
These companies support 120,000 direct and indirect U.S. jobs in plants across the country, the EU said, pointing to sites in South Carolina, Alabama, Mississippi and Tennessee -- southern U.S. states known for their unwavering support for Trump.