The Looming Global Trade War: Trump Pushes for Tariffs Against EU Cars

Written by | Wednesday, July 25th, 2018

US President Donald Trump stood by his threats to impose tariffs on automobile imports as a means to extract concessions from trading partners despite wide-scale opposition from the industry leaders and discontent in Congress. Dissatisfaction with the proposal is growing and the White House received a joint letter from a coalition of foreign and domestic companies and foreign auto dealers voicing their concerns about the tariffs.

A bi-partisan group of 149 House members also urged Donald Trump not to pursue the tariffs but US President still threatened “tremendous redistribution” against the European Union and its cars if talks with EU leaders don’t yield what he could consider a fair deal. According to the US media, Mr. Trump is seeking to re-focus attention on his trade policy while he is struggling to address the criticism over alleged Russian interference in the US presidential election.

The auto tariffs are expected to be high on the agenda of a Commerce Department hearing as well as of today’s (25 July) visit to the White House by European Commission President Jean-Claude Juncker. The Commerce department meeting is part of the efforts to justify that the auto tariffs are not necessary for the US security – the same reason that was given for imposing the tariffs on aluminum and steel.

The automakers commented regarding the alleged reason that “we do not believe the imports of automobiles and automotive parts pose a national security threat”. If the plan succeeds, the auto tariffs would be the biggest tariffs yet. In 2017, the US imported $176 billion worth of passenger cars, $36 billion of trucks and $147 billion of auto components whereby the White House has threated to make all these imports subject to tariffs of 20-25%.

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