EU gives stark warning to US over auto tariffs

Daniel Fowler
July 5, 2018

Murphy noted that additional retaliatory tariffs from Mexico and China would come into effect later in the week. It said that vehicle imports from Europe to the USA had grown at the same pace as demand from the U.S. market, showing that they were filling a gap that domestic output could not, rather than eating into domestic sales as Trump has suggested. Look what they do to our farmers.

Roughly 2,500 public comments had been received by the Commerce Department ahead of the Friday deadline, the agency said in an email to Business Insider, those comments will help the agency make an "informed recommendation" to the President regarding new tariffs. "They treat us very unfairly". "It's bad what they do to us".

The analysis was compiled using data on state exports from the U.S. Department of Commerce and data on U.S. exports subject to foreign tariffs from the official government sources of China, the EU, Mexico, and Canada.

In a letter sent to U.S. Commerce Department Friday, the European Union said tariffs on European cars and vehicle parts were unjustifiable.

In its submission, the European Union said EU companies make close to 2.9 million cars in the United States, supporting 120,000 jobs - or 420,000 if cars dealerships and auto parts retailers are included.

Trump has implemented billions of dollars in tariffs targeted at China, Canada, Mexico and the European Union, saying such moves are needed to offset trade imbalances.

Economists at Bank of America Merrill Lynch have warned that a full-fledged trade war, especially one that lasts more than a year, would slow the US economy.

Trump says North Korea talks 'going well'
The official was not authorized to comment publicly on the matter and spoke on condition of anonymity. Mr Kim's recent trips come in line with his stepped-up push for economic cooperation with China.

The US Chamber of Commerce on Monday (2 July) denounced President Donald Trump's handling of global trade disputes, issuing a report that argued tariffs imposed by Washington and retaliation by its partners would boomerang badly on the American economy.

For investors it is worth reiterating that trade protection will hurt the equity market more than it will hurt the economy.

The Mexican peso see-sawed after leftist Andres Manuel Lopez Obrador won a decisive victory for president. The EU has a 10% levy, compared with 2.5% for cars entering the United States.

Meanwhile, politics is back in the Euro area. In other words, we had a deficit with the European Union.

Joint talks between Merkel's CDU and the CSU are expected to be held today. IHS Markit's May final manufacturing Purchasing Managers' Index for the bloc slipped for a sixth month, falling to an 18-month low of 54.9.

Oil prices fell, reversing course from last week, as supplies from Saudi Arabia and Russian Federation rose while economic growth stumbled in Asia. In June, the rates of expansion in production and new business were the weakest since November 2016 and August 2016 respectively. The S&P has gained 1.7% since the start of the year. Any new USA tariffs would likely lead to further retaliatory measures from China and the EU.

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