Europe is ready to retaliate as trade dispute with US intensifies

Europe is ready to retaliate as trade dispute with US intensifies

Europe is ready to retaliate as trade dispute with US intensifies

President Donald Trump on Friday threatened in a tweet 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 national security.

The price of bourbon whiskey, Levi's jeans and Harley-Davidson motorbikes imported from the U.S. will gradually begin rising for British consumers, after the European Union's retaliatory tariffs on American products came into force.

Donald Trump has threatened a 20% tariff on all European cars if the EU does not remove trade barriers introduced on Friday.

President Trump is threatening to impose a 20 percent tariff on all auto imports from Europe, ahead of results from an investigation initiated last month by his own Commerce Department.

Late last month, he infuriated U.S. allies, from the European Union to Canada and Mexico, by imposing tariffs of 25% on imported steel and 10% on aluminium. The European Union, Canada, Mexico, and India are outraged and have retaliated by imposing tariffs on US goods.

European automotive stocks fell an average of 1% following Trump's tweet, with BMW shares down 2 per cent, Mercedes down 1.4 per cent, and Volkswagen down 1.1 per cent, according to Thomson Reuters data.

Adding as much as £200m per year to the cost of consumer goods arriving in Britain from the United States, the measures came after Donald Trump imposed additional tariffs on imports of steel and aluminium shipped from the EU.

Trump's latest salvo against the European auto industry threatens to broaden a trade war that he's already sparked with China. Shares of USA automakers Ford Motor Co. and General Motors Co. fell immediately after Trump's tweet but rebounded and closed higher. -China trade spat escalated and base metal prices slid.

He is threatening to impose another national security-based tariff on imports of cars, lorries and vehicle parts.

"The upshot: By exporting more finished vehicles from the United States than it imports to the United States, BMW may be helping to lower America's trade deficit".

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The US may justify the auto tariffs on the grounds of national defence, just as it did in March when imposing duties on global imports of steel and aluminium.

Trump held his ground, saying that the trade relationship between the US and the European Union is heavily weighted in favor of the other side. The Wall Street Journal reported that Richard Grenell, the us ambassador to Germany was to present the offer to Trump this week.

Although a large portion of the US's most popular auto models, including those from foreign brands (such as the upcoming BMW X7), are already manufactured within its borders, many are imported from other countries. The potential trade action would affect more than $200 billion in US imports, PIIE said.

The European Union issued an alarming warning today, following Trump's auto tariff comments.

Trump has criticized the European Union's 10% tax on US auto imports, which compares to just a 2.5% USA tax on European cars.

The U.S. action covers 42 "exclusion requests" from the seven companies, including razor maker Schick Manufacturing Inc. of CT, cutting tool maker Nachi America Inc. of IN and specialty steel supplier Hankev International Inc. of California.

The ongoing trade dispute between the United States and China knocked the yuan to 6.4660 per dollar, its weakest in more than five months in the offshore market.

In a retaliatory move, China responded with a 25% tariff on U.S. imports including Bourbon, which will come into play on 6 July.

Customs agents across Europe s colossal market of 500 million people will now impose the duty, hiking prices on US-made products in supermarkets and across factory floors.

In fact, the United States is the largest export market for cars built in the EU. That said, if the current tough talk on trade translates into thorough tariffs, the U.S. dollar could ultimately benefit as traders seek out the perceived safety of the world's reserve currency, even if United States economic growth takes a hit.

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