European Union slaps revenge tariffs on U.S. as trade war erupts

Dwayne Harmon
June 22, 2018

"Needless to say, it is in full respect of EU and [World Trade Organization] rules", said European Commission spokesperson Alexander Winterstein.

This week, Trump further raised concerns of a trade war by asking his trade representative to evaluate an additional $200 billion in Chinese products for additional duties, a move that followed China's retaliatory measure against the United States.

The EU tariffs on $3.4 billion worth of USA products are in retaliation for duties the Trump administration has imposed on European steel and aluminum. Which means even if we are not exporting to the United States directly, we may as well be exporting indirectly by sending our primary products which are commodities and raw materials indirectly to the to the USA through Europe, India or China.

The biggest exporters of cars to the USA are Canada and Mexico, followed by Japan and Germany. "However, the unilateral and unjustified decision of the United States to impose steel and aluminium tariffs on the EU means that we are left with no other choice", EU Trade Commissioner Cecilia Malmstrom said.

The German auto industry supports talks to reduce auto tariffs between the USA and European Union, but only as part of a larger trade negotiation.

The initial wave of European Union retaliatory tariffs is aimed at American goods worth €2.8 billion ($3.2 billion).

"By linking the threatened imposition of US tariffs to European Union tariffs imposed on USA autos, the President has both short-circuited the 232 process and conclusively undercut the stated national security rationale of that investigation", said Daniel Price, a former senior economic adviser to President George W. Bush.

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When the US imposed the tariffs it said it was doing so as a matter of national security - further angering its closest allies, whose tariffs are now targeting President Trump's base of support - in the steel and aluminum industries, but also in farming states, and in whiskey-producing Kentucky.

"The trade that we believe in is built on rules, trust and reliable partnership", President Jean-Claude Juncker said in a speech in Dublin last night.

Lim said: "This is going to escalate, with the USA especially looking at German cars".

The Trump administration this week ratcheted up its accusations that China's trade and intellectual property practices are threatening USA economic interests.

"No, because the U.S. is both an important export market and a strong production base for us", Mattes said. It expects to employ 2,000 people initially, eventually bringing the workforce up to 4,000, according to its website. China also hinted that another $16 billion in tariffs could be slapped onto more American goods, such as coal, crude oil, natural gas and medical equipment.

The spat is part of a wider tussle over global trade. Therefore, I don't want cars made oversees.

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