Trade war: Trump threatens to tax EU car imports in retaliation to opposition
The US levies 2.5% on car imports from countries that don’t have a free-trade pact with it and 25% on mini trucks; and the EU has a tariff of 10% on cars.Updated: Mar 04, 2018 10:04 IST
US President Donald Trump on Saturday escalated trade war rhetoric and threatened to impose steep tariffs on cars from European Union countries if the bloc retaliated to his planned levies on steel and aluminium imports.
“If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US,” Trump wrote on Twitter. “They make it impossible for our cars (and more) to sell there. Big trade imbalance!”
The US levies 2.5% on car imports from countries that don’t have a free-trade pact with it and 25% on mini trucks; and the EU has a tariff of 10% on cars.
The American President is not backing down, not now. On the contrary, he made it clear the other day — “trade wars are good, and easy to win”.
The EU had said on Friday it was ready with its own retaliatory tariff package targeting Harley-Davidson motorbikes, denim and bourbon if Trump went ahead with his plans to impose 25% tariff on steel and 10% on aluminium imports.
The Europeans have picked a politically astute package — the Harleys are manufactured in Wisconsin, which is House Speaker Paul Ryan’s state and bourbon is the prime produce of Kentucky, which is home to Senate majority leader Mitch McConnell. They have guaranteed the attention of the two chambers of Congress.
Trading partners of the US threatened by the metal tariff include allies such as Canada and Australia and rivals China, and they have all criticised the move — Canada, like the EU, has also threatened to retaliate.
India, which sends only 2% of its steel exports to the US, has raised concerns about the Trump administration justifying the levy in national security interest.
Trump has said he will announced the metal tariffs the coming week, and has seemed unperturbed by the flak he is catching, not only from trading partners around the world, but also from within his own administration and the Republican party.
“The United States has an $800 Billion Dollar Yearly Trade Deficit because of our ‘very stupid’ trade deals and policies,” Trump said in a tweet earlier in the day. “Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!”
Citing the same deficit, Trump spoke past week of imposing “reciprocal taxes” on “a country (that) taxes our products coming in at, say, 50%, and we tax the same product coming into our country at ZERO, not fair or smart”.
He took no names but it was clearly India, which he has pointed to sufficient times before, which has 50% tariff on Harley-Davidson motorcycles — brought down in two quick cuts from 100% at one time. And it is Indian bikes that enter America at “ZERO” per cent duty.