The European Union has fired a warning shot to President Donald Trump over auto tariffs, stating that counter measures will be used on US exports worth $294bn if he goes through with his plan to introduce duties on imports in the coming weeks.
The capricious nature of Trump was highlighted again over the weekend when he told Fox News that the EU poses a similar threat on trade as China and is threatening to take on the continental bloc with a 20% duty on auto imports, which is a particular bugbear for the President.
This is not the first sign of tension between the EU and the US as the former already introduced duties for clothing and Harley Davidson motorcycles made in the US, after the latter fired an initial salvo with US tariffs on steel from Europe and aluminum exports. Trump revealed at the weekend that he wanted to do more to protect domestic output.
‘The EU is possibly as bad as China, just smaller, OK. It’s terrible what they do to us,” Trump said on Sunday. “Take a look at the car situation, they send their Mercedes in, we can’t send our cars in. Look what they do to our farmers, they don’t want our farm products. In all fairness they have their farmers so they want to protect their farmers. But we don’t protect ours and they protect theirs.’
The European Commission has responded to the escalating threats with a letter to the US authorities. The EC is responsible for outlining trade policy for the 28 members of the EU and it made it very clear that the US economy could suffer if Trump went through with his auto tariff plans.
Appealing to the US government with research and facts rather than rhetoric, the EU said hundreds of billions of dollars’ worth of US exports would be subject to counter measures, which would impact numerous sectors across the US economy. “Economic analysis confirms that an increased tariff on these products will be harmful first and foremost for the US economy,’ the letter said.
The value of the US exports is considerable as it is equivalent to almost a fifth of all US exports last year. The commission also made a point about the long tradition of European car manufacturers in the US, adding that they were “well established” and vital contributors to the economy Stateside. The EC added: “In 2017, US-based EU companies produced close to 2.9 million automobiles, which accounted for 26% of total US production.”
European car companies support 120,000 jobs in US plants all over the country. The EC concluded by saying that many of these jobs are in states where support for Trump and the GOP has remained strong since he arrived in office in early 2017.
In his interview with Fox News, Trump said he loved some of the countries in the EU but believes they “treat us very badly” and “very unfairly” and repeated his unfounded claim that the bloc has a $151bn trade surplus with America. He also urged EU countries who are NATO members to spend more on defense rather than relying on the US.
He added: “I can say it better in a different way. They made, last year, $151bn in trade surplus. We had a deficit with the EU. On top of that, we spend a fortune on NATO to protect them.’ Trump’s latest comments come ahead of the EU summit next week, where he will be present before making a controversial visit to Britain and then meeting Vladimir Putin in Finland.