White House threatens to impose further tariffs on European car imports

March 13, 2018

The United States has stated it may place further levies on imports of European cars. According to US President Donald Trump, imported cars from European automakers would be targeted after the EU was said to be considering imposing 25% tariffs on popular US imports to the EU – this move itself a response to the US’s announced 25% tariff on imports of steel and 10% on aluminium.

In a recent tweet, the US President stated, “If the EU wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars [sic] which freely pour into the U.S.”

The US is the largest export market for EU cars, accounting for 25% of the €192 billion worth of motor vehicles exported by the EU in 2016. Germany is responsible for just over half of the EU’s car exports and is expected to be hardest struck by the proposed tax.

The steel and aluminium tariffs are expected to come into effect on March 23. Several talks have been held in the weeks since these tariffs were announced, with Canada, Mexico and Australia having secured exemptions. However, following a recent meeting in Brussels between EU Trade Commissioner Cecelia Malmstrom and US Trade Representative Robert Lighthizer, it is reported to have concluded without the EU receiving assurances that it would also be exempted.

Asked to respond to the US Presidents’ accusations that the EU is imposing barriers to U.S. automakers, Malmstrom said that “it’s hard to argue on Twitter over these issues, but the European Union is a very open market.” The bloc does impose a 10% levy on U.S. car imports, while the U.S. charges a 25% levy on trucks and pickups, and up to 40% on some clothes, she said.

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