President Trump on Friday threatened to unilaterally impose a 20 percent tariff on all automobile imports from Europe, further breaking from Republicans in Congress and front-running an investigation he had ordered from the Commerce Department into whether these imports harm the U.S.'s national security.
"Based on the Tariffs and Trade Barriers long placed on the US and it great companies and workers 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", Trump tweeted. The European Autos Stocks Index fell sharply after Trump's 20 per cent tariff tweet and was last down 1.25 per cent. Ford Motor Co shares went into the red and were down 0.5 per cent, while General Motors Co shares were off 0.3 per cent.
Most economists say the outcome of higher worldwide import tariffs will drive up costs for consumers, offsetting much of the benefit of protecting domestic industries for the country imposing them. The EU imposes a 10 percent tariff on imported US cars.
The exemption applies to seven US -based companies importing steel products from Japan, Sweden, Belgium, Germany and China, the department said. It's reported that Trump said the tax would be upheld until Fifth Avenue was devoid of Mercedes models.
"We are already beginning to see some increased regulatory scrutiny against US companies operating in the market, whether it is increased Customs enforcement, local emissions inspections at our companies' factories or stricter enforcement of the advertising law", said Mr Jake Parker, vice-president of China operations for the US-China Business Council in Beijing. "Automakers support reducing trade barriers across the board and achieving fairness through facilitating rather than inhibiting trade". Most of the units imported from Germany are premium cars, which tells a lot about the position of American vehicle industry in the premium market.
Economists noted that the amount of money involved with India's levies dwarfed in comparison with that of China - U.S. -India trade was $126 billion past year, while U.S. Automotive News data shows about 7.2 percent of vehicles sold in the United States through May were assembled in Europe.
Japanese vehicle makers accounted for 92,000 jobs in the USA, according to the Japanese Auto Manufacturers Association's annual report.
"This first set of exclusions confirm what we have said from the beginning - that we are taking a balanced approach that accounts for the needs of downstream industries while also recognizing the threatened impairment of our national security caused by imports", Commerce Secretary Wilbur Ross said. Europeans claim it is simply protectionism and breaks global trade rules.
In 2017, the USA accounted for about 15% of worldwide Mercedes-Benz and BMW brand sales.
