Daily Trends Now
Daily Trends Now

U.S. tariffs on cars could affect $400b in trade

U.S. tariffs on cars could affect $400b in trade

The US has pledged to impose 25 per cent tariffs on $34bn in Chinese goods on July 6, and China vowed to retaliate in the same amount of US imports. "The woes the administration is inflicting on Chinese companies do not simply translate into boons for USA enterprises and the US economy". During a recent panel, his former economic adviser Gary Cohn recounted a story in which, he said, Trump asked why all cars in the U.S. weren't made domestically.

The trade dispute escalated this week after President Donald Trump on Monday said he has asked the US trade representative to identify an additional $200 billion worth of Chinese goods for an additional 10 percent in tariffs. He has frequently criticized both allies and adversaries for imposing tariffs and trade barriers on American goods.

Germany is the largest European manufacturer of automobiles, though German companies have a huge presence in the United States, with large factories in SC and Tennessee.

When the US Commerce Department investigation into the auto industry was announced last month, European Union spokesman Margaritis Schinas said there was no justification for the tariffs on steel and aluminium, adding that "invoking national security would be even more far-fetched in the case of the vehicle industry". "Consumers fare best when tariffs are low", Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, said in a statement.

This morning, Trump tweeted that "if [EU trade tariffs] are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!"

A former White House trade adviser says Trump "has been so belligerent that it becomes nearly impossible for democratically elected leaders - or even a non-democratic leader like [Chinese President] Xi Jinping - to appear to kowtow and give in".

She said: "Rules of global trade, which we have developed hand in hand with our American partners, can not be violated without a reaction from our side".

Trump has always been fixated on imported cars.

Last month, the White House said it would also propose investment restrictions and exports controls by June 30 to protect national security against the threat of China. As the instigator of the recent trade tensions with most of its major partners (China, Canada, Mexico and the EU), the United States economy could soon see exports take a hit from multiple directions. Administration officials have said China should strengthen protections for USA companies' intellectual property, and reduce tariffs on U.S. products.

One of the most frequently discussed items on the EU's list is bourbon, a specialty from Kentucky, the home state of Senate Majority Leader Mitch McConnell, a Republican.

"Though the immediate effects on United Kingdom retailers might look relatively modest, it is worth paying close attention to this dispute because it's future course is unpredictable, fast moving and could quickly escalate to engulf other, seemingly unrelated areas of trade", he said. The so-called "Chicken Tax" on light trucks has effectively isolated the U.S.in truck makes and models and required automakers to invest billions into production facilities in North America to produce the trucks and skirt the steep tariff. While the results of that investigation are still weeks away, Trump raised the specter of tariffs on Twitter. Trump has slammed United States automakers for manufacturing vehicles overseas.

TRT World's Sarah Morice has more. The US exported $10 billion worth of passenger vehicles to the European Union past year. It accounts for 5 percent of Volkswagen's VW brand sales and 12 percent of its Audi brand sales.


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