Trump greets EU trade reprisals with threat of steep auto tariff

By David Shepardson

 

FILE PHOTO - Parked cars are pictures at the car terminal at the port of Valencia, Spain May 29, 2018. Picture taken May 29, 2018. REUTERS/Heino Kalis

 

WASHINGTON (Reuters) - President Donald Trump on Friday threatened to escalate a trade war with Europe by imposing a 20 percent tariff on all U.S. imports of European Union-assembled cars.

 

Trump posted his threat on Twitter the day European Union reprisals took effect against U.S. tariffs on European steel and aluminum. The EU targeted $3.2 billion in American goods exported to the 28-member bloc.

 

"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 U.S. Build them here!" Trump wrote.

 

A month ago, the administration launched a probe into whether auto imports pose a national security threat.

 

The United States currently imposes a 2.5 percent tariff on imported passenger cars from the European Union and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported U.S. cars.

 

German automakers Volkswagen AG <VOWG_p.DE>, Daimler AG and BMW AG build vehicles at plants in the United States. Industry data shows German automakers build more vehicles in southern U.S. states that voted for Trump than they ship to the United States from Germany.

 

The European Autos Stocks Index fell sharply after Trump’s tweet and closed down 0.5 percent. Shares of U.S. automakers Ford Motor Co and General Motors Co fell immediately after Trump's tweet but rebounded and closed higher.

 

The Commerce Department has scheduled two days of public comments in July in its probe of the national security implications of imported automobiles and auto parts. Commerce Secretary Wilbur Ross said Thursday the department aims to wrap up the probe by late July or August, but added the probe is in its "early stages."

 

Last month, Evercore ISI said in a research note that a 25 percent import tariff on auto imports "would pretty much destroy the business of importing cars from Europe/China" to America.

 

Major automakers and at least two dozen auto suppliers are gearing up to file written comments sharply opposing the tariffs before a June 29 deadline. U.S. auto executives said privately they have spent months looking at the potential impacts to sales of new tariffs, and they view the presidential tweet as a sign significant new tariffs appear likely.

 

Trump has launched or threatened an array of trade measures, saying he aims to create U.S. jobs and protect domestic industries.

 

He has threatened duties on up to $450 billion of imports from China. Such a move could raise prices for American consumers and businesses and hit global supply chains for industries like carmakers and electronics. Chinese reprisals have hit American farmers already.

 

Trump’s trade policies have also escalated conflict with Canada and Mexico as he seeks to renegotiate the $1.1 trillion North American Free Trade Agreement.

 

German automakers did not comment on Trump's tweet.

 

The Alliance of Automobile Manufacturers, representing major U.S. and European automakers, said "tariffs raise vehicle prices ... limit consumer choice and invite retaliatory action by our trading partners. Automakers support reducing trade barriers across the board.”

 

German auto industry association VDA said Germany exported 657,000 cars to North America, 7 percent less than a year earlier, and 200,000 fewer cars than in 2013.

 

German-built vehicles exported to the United States fell 10 percent to 494,000 vehicles, while German automakers produced 804,000 vehicles in the United States last year. Automotive News data shows about 7.2 percent of vehicles sold in the United States through May were assembled in Europe.

 

Trump has repeatedly criticized German auto imports. He reportedly told French President Emmanuel Macron he wanted to halt Mercedes-Benz models from driving down Fifth Avenue in New York City. He told automakers at a White House meeting in May he was planning tariffs on some imported vehicles.

 

Republican lawmakers and business groups have opposed higher auto tariffs.

 

The Auto Alliance has said it was “confident that vehicle imports do not pose a national security risk.”

 

The U.S. Chamber of Commerce noted that American auto production has doubled over the past decade, and said tariffs “would deal a staggering blow to the very industry it purports to protect and would threaten to ignite a global trade war.”

 

The United States in 2017 accounted for about 15 percent of worldwide Mercedes-Benz and BMW brand sales. It accounts for 5 percent of VW brand sales and 12 percent of Audi sales.

 

 

-- © Copyright Reuters 2018-06-23

1 minute ago, rooster59 said:

Industry data shows German automakers build more vehicles in southern U.S. states that voted for Trump than they ship to the United States from Germany.

 

5-5-5

 

21 minutes ago, mtls2005 said:

 

5-5-5

 

not hard if you know that the only merc factory is in Alabama

24 minutes ago, mtls2005 said:

 

5-5-5

 

"Industry data shows German automakers build more vehicles in southern U.S. states that voted for Trump than they ship to the United States from Germany."

 

not hard if you know that the only merc factory is in Alabama

28 minutes ago, retell said:

not hard if you know that the only merc factory is in Alabama

 

I know it. Anyone with an ounce of grey matter knows there are many, many, many foreign auto manufacturers (and jobs) in the U.S..

 

http://www.cnhi.com/featured_stories/list-of-foreign-auto-manufacturers-with-plants-in-us/article_362cd59a-c3cb-11e7-b69d-33038456b479.html

 

I guess my comment was meant to illustrate that tRump doesn't know it.

 

Forgetting for a moment about the dealers, salespeople, service-people, parts manufacturers who employs thousands of people. And that "domestic" manufacturers cannot pick up the slack, let alone make similarly market-acceptable vehicles.

 

Honestly, he acts like a toddler who threw his bowl on the floor and the whines. Screw facts and figures, slap a tariff on it.

 

 

Edited June 23, 20188 yr by mtls2005

"The art of the deal", 555 ! This is either more trump tough talk in that game of bluff that he "tries" to play or who knows, since he speaks and tweets impulsively, putting his mouth or tweet fingers in gear before his brain, maybe he is stupid enough to impose these tariffs.

Maybe the short term pain will be worth it for the long term gain. Starting a global trade war will certainly sound the death knell for his presidency. We will all survive, he, his clan and his brown nosing subordinates will not.

My Subaru was built in Indiana, FWIW...

Okay, disagreeing with Trump aside, what really bothers me is the lack of considering more than one move ahead: "If we do this, then they will....". I suppose I should be thankful for that somewhat.... So many examples: pull out of TPP, immigrant children separation, trade war fueling... "Gee, we couldn't imagine that happening". Get some imagination... Trump rids himself of those who dare stand up and say "Respectfully, sir, that idea is bat sh*t crazy"

3 hours ago, rooster59 said:

The United States currently imposes a 2.5 percent tariff on imported passenger cars from the European Union and a 25 percent tariff on imported pickup trucks.

Who imports pick up trucks? I thought Toyota and Nissan (who sell well in the States) trucks were made there.

 

3 hours ago, rooster59 said:

we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!" Trump wrote.

That is particularly going to hurt LRJ - Land Rover Jaguar.

Ze Chermans will just up production  in the US.

*******************************

The Americans have never really got it, there is a reason why US cars are not big sellers outside of the USA or the Middle East or where benzin/petrol/gasoline is sold cheaply.

****************************

There is a reason why German cars are popular WORLDWIDE. Hint, maybe they are a bit good, unlike....

*******************

This is going to get messy.

No winners. Losers all round....

2 minutes ago, thaiguzzi said:

Who imports pick up trucks? I thought Toyota and Nissan (who sell well in the States) trucks were made there.

 

That is particularly going to hurt LRJ - Land Rover Jaguar.

Ze Chermans will just up production  in the US.

*******************************

The Americans have never really got it, there is a reason why US cars are not big sellers outside of the USA or the Middle East or where benzin/petrol/gasoline is sold cheaply.

****************************

There is a reason why German cars are popular WORLDWIDE. Hint, maybe they are a bit good, unlike....

*******************

This is going to get messy.

No winners. Losers all round.... 

No winners. Losers all round....

 

You're so right. The only problem is that Trump is in over his head and has no idea that he is running a country and not a business.

2 hours ago, rudi49jr said:

No winners. Losers all round....

 

You're so right. The only problem is that Trump is in over his head and has no idea that he is running a country and not a business.

It's about time this country is run like a business. That is the core of the problems. We need to get to profitability all across the board in this country and get rid of the deficit. It's gonna hurt up front, but Trump is just the man to get it done. Trade fair or pack your shit and sell it somewhere else.

Uh Donald shouldn’t you be after China instead of our allies in Europe?oh I get it you are scared of China but figure you can bulley Europe cause of the need for NATO Donald you are a wrecking ball you burn everything you touch 

6 hours ago, rooster59 said:

The United States currently imposes a 2.5 percent tariff on imported passenger cars from the European Union and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported U.S. cars.

Hang on a minute - it makes perfect sense for the us to impose the same import tariff as the eu?

 

Edit - the high tariff on pickup trucks makes sense, as this is a huge business in the us?

Edited June 23, 20188 yr by dick dasterdly

25 minutes ago, jackh said:

get rid of the deficit. It's gonna hurt up front, but Trump is just the man to get it done.

What Trump and his Republican Congress have done is put American in a further  trillion dollar deficit with last year's budget approval. And asking for more debt this year for a border wall, Space Agency and subsidies for declining industries.

Just now, Srikcir said:

What Trump and his Republican Congress have done is put American in a further  trillion dollar deficit with last year's budget approval. And asking for more debt this year for a border wall, Space Agency and subsidies for declining industries.

What has this to do with this specific topic?

 

Perhaps better posted in a general 'hate trump' thread?

32 minutes ago, dick dasterdly said:

Hang on a minute - it makes perfect sense for the us to impose the same import tariff as the eu?

 

Did this thought just occur to you? Sometimes it's a bit more complicated than a box of chocolates.

 

And why does it make "perfect sense"? Or any sense at all?

 

I guess I would work hard to negotiate fair trade deals, either one-on-one or as part of a larger continuum (WTO, NAFTA, TPP), which balances benefits for consumers, workers, companies, nascent industries, national security and trading partners. Rather than lamenting the number of Mercedes-Benzes the President hates to see on Fifth Avenue.

 

 

If we make foreign autos more expensive domestic manufacturers will be more inclined to raise prices, hurting consumers.

 

And let's not forget the thousands of folks who work to sell, service these foreign autos.

 

Even if the EU reduced tariffs on U.S. autos that doesn't mean they can instantly be sold there. Automakers would have to invest heavily in creating dealerships, sale/marketing/advertising, service and support just to sell the first car. It might take 20+ years to get to the point where it's profitable.

 

Maybe it would be better to negotiate off-set tariffs on goods which we can more easily export from day 1?

49 minutes ago, dick dasterdly said:

Hang on a minute - it makes perfect sense for the us to impose the same import tariff as the eu?

 

Edit - the high tariff on pickup trucks makes sense, as this is a huge business in the us?

 

4 minutes ago, mtls2005 said:

 

Did this thought just occur to you? Sometimes it's a bit more complicated than a box of chocolates.

 

And why does it make "perfect sense"? Or any sense at all?

 

I guess I would work hard to negotiate fair trade deals, either one-on-one or as part of a larger continuum (WTO, NAFTA, TPP), which balances benefits for consumers, workers, companies, nascent industries, national security and trading partners. Rather than lamenting the number of Mercedes-Benzes the President hates to see on Fifth Avenue.

 

 

If we make foreign autos more expensive domestic manufacturers will be more inclined to raise prices, hurting consumers.

 

And let's not forget the thousands of folks who work to sell, service these foreign autos.

 

Even if the EU reduced tariffs on U.S. autos that doesn't mean they can instantly be sold there. Automakers would have to invest heavily in creating dealerships, sale/marketing/advertising, service and support just to sell the first car. It might take 20+ years to get to the point where it's profitable.

 

Maybe it would be better to negotiate off-set tariffs on goods which we can more easily export from day 1?

"Did this thought just occur to you? Sometimes it's a bit more complicated than a box of chocolates."

 

Please forgive me - I'm not interested in resorting to insults as an argument.

The orange clown puts millions of jobs at risk.
Not only with its trading partners, but also in the USA itself.
All consumers worldwide (including the US) will have to pay higher prices.
The orange clown violates WTO rules and accuses his - now former friends - of being a national security risk.
Canada, Mexico, Japan, India, China, EU, New Zealand, Brazil and many other countries will continue to respond. Trust in the US as a reliable trading partner is destroyed. The orange clown forces an unintentional war on the American citizen. A trade war. The orange clown also lies to his population. If you look not only at the trade balance sheets, but also at the service- and financial balance sheets (services and finances), the values are completely different.

There is a risk that the orange clown will create an anti-America sentiment worldwide. USA go home, boycott of American products will be one of the consequences. Trump makes almost all the countries of this earth an enemy.
Exceptions are Saudi Arabia (where he sold billions of war material), Australia (where the US has a double trade surplus, which does not bother him at all) and North Korea (with Kim, his new friend for good PR news).

The direct investments in the USA as a production site are in a freefall. A research by the Rhodium Group saying that Chinese investment in the United States declined 92 percent to $1.8 billion in the first five months of the year, its lowest level in seven years.

The US Farmers, Boeing, Caterpillar, Whiskey Distillers, Harley Davidson, Deere, A.O. Smith, Cummins, Tiffany, Weber, EXPD, Qualcomm, BorgWarner, etc, are just a few companies that will feel the stupid politics of the orange clown.

If you blackmail, threaten, and corner your trading partners, you do not have to be surprised that there will be counter-attacks. Once the affected countries start taxing the Internet US companies hard, corporate profits will not flow back to the US.

The fact that the orange clown believes that he can win a worldwide trade war without damage is unbelievable.

Edited June 23, 20188 yr by tomacht8

5 hours ago, tomazbodner said:

I would say to EU leaders... Go with it and double down, after all you're dealing with Trump. Put 25% tariffs on all US imports, and heavily tax all US based real estate investment with threat of 100% tariffs if US dares to retaliate. Art of the deal. Now let's see if his negotiation skills are real or total BS. 

The rest of the world would be wise to start ensuring that the large US conglomerates start to pay taxes on the money earned in the same country instead of allowing them to shift money around to avoid these taxes.

7 hours ago, Srikcir said:

What Trump and his Republican Congress have done is put American in a further  trillion dollar deficit with last year's budget approval. And asking for more debt this year for a border wall, Space Agency and subsidies for declining industries.

Like coal mines?

What Trump can't grasp is that automobiles, planes, trains, etc are no longer made in one country. There is a huge web of suppliers making individual parts shipped around the globe with final assembly being done globally.

Tariffs against a country will cause as much problem in USA as  they will in the country he attacks. 

He continuously attacks Canada and we have a trade deficit with US.

Nobody wins a trade war and Trump is initiating the largest one in history with every country in the world. 

Make America  White  Great Again.

15 hours ago, tomazbodner said:

I would say to EU leaders... Go with it and double down, after all you're dealing with Trump. Put 25% tariffs on all US imports, and heavily tax all US based real estate investment with threat of 100% tariffs if US dares to retaliate. Art of the deal. Now let's see if his negotiation skills are real or total BS. 

I suggest EU puts a SUBSIDY on US car imports just to piss off Trump ?

13 hours ago, jackh said:

It's about time this country is run like a business. That is the core of the problems. We need to get to profitability all across the board in this country and get rid of the deficit. It's gonna hurt up front, but Trump is just the man to get it done. Trade fair or pack your shit and sell it somewhere else.

OK. Bye!

Does anybody have a source that sums up what tariffs EU and US put on their respective imports / exports?

So far I have heard only politician talk. It would be nice to have some facts.

 

 

13 hours ago, dick dasterdly said:

Hang on a minute - it makes perfect sense for the us to impose the same import tariff as the eu?

 

Edit - the high tariff on pickup trucks makes sense, as this is a huge business in the us?

On average the tariff % imposed by the USA is exactly the same as the one imposed by the EU. The distribution between product categories is just different. There are no unfair tariffs.

There is a noticeable trade deficit between the USA and Germany. It has not come to Trump's mind that the Greman economy may simply be more competitive?

Trump focused on products but forgot to take into account services. You know, American Express, Google, Facebook, etc... Lol! ?

Edited June 23, 20188 yr by candide

20 hours ago, dick dasterdly said:

What has this to do with this specific topic?

Response to Jackh's comment post 11.

21 hours ago, jackh said:

We need to get to profitability all across the board in this country and get rid of the deficit.

You didn't object then to Jackh, why now?

Perhaps better posted in the 'hate reality thread'?

21 hours ago, Tug said:

Uh Donald shouldn’t you be after China instead of our allies in Europe?oh I get it you are scared of China but figure you can bulley Europe cause of the need for NATO Donald you are a wrecking ball you burn everything you touch 

That simple minded solution of going after China makes zero sense.

 

Look if we want China to reduce their tariffs on US goods, how do we answer the Chinese when they say, "Well, you allow the EU to tax the hell out of your products"?

 

Trump is right to demand "fair trade" from everyone. Look we have shuttered factories everywhere and millions of Mexicans who want to work in them. We can produce everything we get from EU and China.

17 hours ago, ResandePohm said:

The rest of the world would be wise to start ensuring that the large US conglomerates start to pay taxes on the money earned in the same country instead of allowing them to shift money around to avoid these taxes.

I agree with that AND reduce tariffs to zero. Then those terrible US conglomerates can shut those inefficient factories and build everything in the US.

Trump responds to Harley-Davidson, says it's waving the 'White Flag' by moving production out of US because of tariffs

 

President Donald Trump attacked Harley-Davidson on Twitter on Monday after the company announced it was shifting production out of the US because of Trump's trade fight with the EU.

"Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag," Trump said.

Trade experts say that Harley's move is likely the first of many production moves by US companies.

http://www.businessinsider.com/trump-harley-davidson-trade-tariffs-production-move-2018-6

3 hours ago, bristolboy said:

Trump responds to Harley-Davidson, says it's waving the 'White Flag' by moving production out of US because of tariffs

 

President Donald Trump attacked Harley-Davidson on Twitter on Monday after the company announced it was shifting production out of the US because of Trump's trade fight with the EU.

"Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag," Trump said.

Trade experts say that Harley's move is likely the first of many production moves by US companies.

http://www.businessinsider.com/trump-harley-davidson-trade-tariffs-production-move-2018-6

 

I'm surprised (or rather NOT) that the media all use the case of Harley Davidson, because it's a rather small company which is in the nowadays rather rare situation of exporting from the USA to the EU, but which doesn't matter at all in the big picture.

 

I haven't heard so far of a media publication of an analysis of how imports and exports will be impacted by tariffs and what the likely influence on US and EU economies will be.

Instead, they concentrate on an insignificant story that makes Trump look bad.

 

 

Edited June 26, 20188 yr by manarak

1 hour ago, manarak said:

 

I'm surprised (or rather NOT) that the media all use the case of Harley Davidson, because it's a rather small company which is in the nowadays rather rare situation of exporting from the USA to the EU, but which doesn't matter at all in the big picture.

 

I haven't heard so far of a media publication of an analysis of how imports and exports will be impacted by tariffs and what the likely influence on US and EU economies will be.

Instead, they concentrate on an insignificant story that makes Trump look bad.

 

 

You mean like the story of the bonuses some companies were giving after the tax cut? Did that bother you, too?