US President Donald Trump on Friday threatened to slap a 20 per cent tariff on cars imported from European Union, escalating the trade war he began last month against various countries including China and India. “Based on the Tariffs and Trade Barriers long placed on the US (…) by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the US Build them here!” Trump said.
In response to Trump’s new policy, the European Union started enforcing tariffs on American imports like bourbon, peanut butter and orange juice. The EU tariffs on $3.4 billion worth of U.S. products are in retaliation for duties the Trump administration has imposed on European steel and aluminum and are seen as “rebalancing charges”.
The EU trade commissioner acknowledged that it had targeted some iconic American items to increase political pressure on the US President and senior US politicians. European Commission spokesman Alexander Winterstein said the EU’s response is proportionate and reasonable. Daniel Gros, director for Economy and Finance at the Centre for European Policy Studies, said that in a trade war everyone stands to lose, but the US has put itself in a worse position.
“I think the United States is losing more because it has put tariffs on a very important input which very often it doesn’t produce itself,” Daniel Gross said. “The EU perhaps will find a few disgruntled consumers who have to pay more for their Harley Davidsons, but that is not a big loss for us,” he added.
Earlier, China underestimated President Donald Trump’s resolve to move forward with tariffs unless Beijing changes its “predatory” trade practices, a top US trade advisor said on Tuesday, in comments that diminished the chances of a negotiated settlement to a looming trade war between the world’s economic superpowers.
White House trade adviser Peter Navarro, who viewed China as a rival economic and military power, had said Beijing had more to lose from a trade war. With Trump’s latest salvo, he threatened tariffs on up to $450 billion in China’s exports, out of a total of just over $500 billion in goods sold to the United States. “The fundamental reality is that talk is cheap,” Navarro had told reporters on a conference call, saying China “may have underestimated the strong resolve of President Donald J. Trump.
The growing US trade conflict with China hit financial markets hard, and Beijing vowed a firm response. It accused the United States of “extreme pressure and blackmailing” and vowed to retaliate after Trump on Monday threatened to slap a 10 percent tariff on $200 billion of Chinese goods in addition to the import duties previously announced on $50 billion in goods. The Indian government joined in on the bandwagon by hiking higher duties on a number of items including apples, almonds, walnuts, diagnostic reagents and certain steel products. A bulk of these products figured in a list of items imported from the US, alongside other countries.
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