Published: Fri, June 22, 2018
Money | By Hannah Jacobs

Trump threatens 20-per-cent tariff on European Union cars

Trump threatens 20-per-cent tariff on European Union cars

European Commission president Jean-Claude Juncker said duties imposed by the United States on the EU go against "all logic and history".

When a trade war happens, it just doesn't affect the two economies involved but all the economies open to world trade.

In March, President Trump pledged to impose 25 percent tariffs on steel imports and 10 percent tariffs on aluminum imports from Canada, Mexico and the European Union.

The biggest exporters of cars to the US are Canada and Mexico, followed by Japan and Germany.

When the USA tariffs on steel and aluminum went into effect on June 1, the European Union said they were "illegal", pledged to impose its own tariffs, and filed a case against the the World Trade Organization.

"The U.S. abuses tariffs to trigger trade wars everywhere around the globe and that will severely damage the world trade order, hurt the interests of trading partners, and also hurt its domestic companies and people", Ministry of Commerce spokesman Gao Feng said at a regular briefing in Beijing on Thursday. Beijing has vowed to immediately retaliate with its own tariffs on USA soybeans and other farm products in a direct shot at President Donald Trump's supporters in America's heartland.

India had sought to be exempt from the new USA tariffs on steel and aluminum, arguing its exports were small in comparison to other countries, but got nowhere.

Lim said: "This is going to escalate, with the United States especially looking at German cars".

Trump last week carried out a threat he made earlier this year by announcing he would impose $50 billion worth of tariffs on Chinese goods.

President Trump said the measures against the EU are meant to protect US national security interests, but the Europeans claim it can not be that close allies, many of them North Atlantic Treaty Organisation partners, would endanger USA security.

Trump has also started a trade fight with China over Beijing's sharp-elbowed efforts to overtake US technological dominance.

The Chinese have said they will respond in kind.

Trade representatives from India and the United States are set to meet in New Delhi next week. The department expected 4,500 requests. Several weeks ago, he ordered Commerce Secretary Wilbur Ross to launch what's known as a "232" investigation.

"We've never seen anything like this", said Mary Lovely, a Syracuse University economist who studies global trade - at least not since countries tried to wall themselves off from foreign competition during the Great Depression.

"For most American families, their auto is the second biggest purchase they make", Hatch told Ross.

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