European Union warns Trump that auto tariffs could lead to $300B retaliation

EU is possibly as bad as China’ Trump attacks partners in new ‘unfair trade’ rant

The fact that American vehicle manufacturers are urging President Trump not to tax (impose tariffs) us consumers any further is an indication of the complexity of trade and why tariffs are a 19th century policy tool that doesn't work in the 21st century world of long and involved supply chains.

With some of America's closest trading partners imposing retaliatory measures, Trump's approach to tariffs has unsettled financial markets and strained relations between the White House and the Chamber.

The European Union and Canada have also threatened to impose tariffs on billions of dollars worth of usa products.

In its submission, the European Union argues that trade restrictions would be likely to lead to higher costs for US-based producers, and in effect become a tax on American consumers.

The Chamber, the nation's largest business lobbying group and a traditional ally of Trump's Republican Party, said the White House is risking a global trade war with its push to protect United States industry and workers with tariffs. Investors' jitters over escalating global trade tensions and weak economic data from Asia weighed on the market.

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U.S. tariffs on steel and aluminum imports have provoked retaliatory measures against billions of dollars of American exports. China will continue to assess the impact of the trade dispute and will help firms cope with possible shocks, Gao said.


The European Commission, the EU executive that handles trade for the bloc, said on Monday it was trying to convince its United States counterparts that imposing such tariffs would be a mistake. In response, China has said it will raise import duties on $34 billion worth of American goods.

Those tariffs kicked in on Sunday.

Connecticut, with $134 million in exports potentially subject to tariffs - from millions in scrap metal to $4,595 in sleeping bags - is second only to MA among the six New England states.

The EU said the USA auto industry is in good health, but any restrictive duties could undermine that trend. The three Texas industries facing the biggest risk are all big traders with Canada, which has announced $12.6 billion in retaliatory tariffs against American-made products since Trump placed new tariffs on its aluminum steel.

The Chamber is expected to spend millions of dollars ahead of the November elections to help candidates who back free trade, immigration and lower taxes.

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Instead of backing down, trading partners have responded in kind with similar threats, although the numbers tend to be a little higher, i.e. the US tariff threat total of $200 billion was met by the EU's threat of $300 billion.

The EU letter suggested new tariffs could trigger a loss of $14 billion to the USA economy.

China is putting pressure on the European Union to issue a strong joint statement against President Donald Trump's trade policies at a summit later this month but is facing resistance, European officials said.

Trump has threatened to place tariffs on European automobiles, but has not yet followed through.

Trump initially granted Canada, EU members and other nations exemptions on the metal tariffs - 25% on steel and 10% on aluminum.

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In a letter to USA authorities, the European Commission, which handles trade policy for the bloc's 28 members, said "up to $294 billion of US exports. could be subject to countermeasures across sectors of the US economy". The EU and the USA industry specialise in largely different market segments and over the last 5 years imports from the EU have been stable.

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