Today, as Reuters news agency reported, the President of the United States Donald Trump threatened to escalate a trade war with Europe by imposing a 20 percent tariff on all usa imports of European Union-assembled cars.
On June 1, US tariffs of 25 percent on steel and 10 percent on aluminum against the EU, Canada and Mexico took effect.
The list of USA imports worth 2.8 billion euros (3.24 billion US dollars) will now face additional duty at the European Union border.
The move comes a little more than a month after Trump asked the Commerce Department, led by Wilbur Ross, to investigate whether or not auto imports pose a national security threat.
President Donald Trump fired back immediately, repeating his threat to impose tariffs on European auto exports to the United States.
The tariff could hike new auto prices by thousands of dollars on popular models from automakers such as BMW, Mercedes-Benz, Volkswagen, Volvo, Audi, Buick, Honda, Jaguar, Jeep, Fiat, Land Rover, and Porsche.
"Build them here!" he added.
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The President's tweet caused a tectonic shift, cratering the European Auto Stocks Index, and causing shares of US automakers Ford Motor Co and General Motors Co to rapidly fall, and then rebound, Reuters noted. Ford Motor shares went into the red and were down 0.5%, while General Motors shares were off 0.3%.
Commerce Secretary Wilbur Ross in May launched an investigation into whether auto imports hurt U.S. national security.
What was considered a looming trade war a few weeks ago is now for real, as trade disputes are rapidly escalating.
The auto tariffs are a part of a broader agenda by the White House.
The trader said many more exclusion requests for imports from Japan were still awaiting results and were expecting to be exempted from the tariffs.
European Union trade officials have described the United States tariffs on steel and aluminum - justified by the Trump administration on grounds of national security -- as "illegal". If other countries retaliate and tax similar products, a whopping 624,000 U.S.jobs may be lost, the research firm estimates. The Wall Street Journal reported that Richard Grenell, the USA ambassador to Germany was to present the offer to Trump this week.
German vehicle makers employ more than 36,000 workers in the U.S. Another 80,000 work for American suppliers, according to German auto industry group VDA.
In May, the Trump administration floated a 25 percent tariff on vehicle imports, framing them as a means to ensure the vitality of key US industries.
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All told, the new duties impact about $3.2 billion worth of USA exports.
Autos stocks fell on the news.
"Tariffs would raise the cost of these parts and domestic production, which makes products more expensive to consumers and lowers demand for them in the United States and overseas", according to PIIE's analysis.
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It's the latest in a string of outbursts by Trump in his frustration at trade tarriffs, having expressed disappointment previously at the disparity between European vehicle sales in the U.S., and United States auto sales in the EU. American companies which have huge investments amounting to more than $200 billion in China's fast-growing market, will obviously be hurt.
Customs agents across Europe s colossal market of 500 million people will now impose the duty, hiking prices on US-made products in supermarkets and across factory floors.
Big River Steel, which has a $1.3 billion steel mill near Osceola, does not comment on trade policies or tariff issues, a company spokesman said.
If China Retaliates to Tariffs, US Will Impose More
Hopefully, the U.S. -China trade war doesn't get to the point where Apple will have to make this decision. That response prompted President Trump to threaten an additional $200 billion of tariffs .