Trump steps up war of words on trade with threat to tax EU cars | 2018-03-04 |

Trump steps up war of words on trade with threat to tax EU cars

BBC     4th March, 2018 09:16:23 printer

Trump steps up war of words on trade with threat to tax EU cars


US President Donald Trump has stepped up his war of words over trade tariffs, threatening to "apply a tax" on imports of cars from the European Union.


Mr Trump said other countries had taken advantage of the US for years because of its "very stupid" trade deals.


The trade wrangle began on Thursday when Mr Trump vowed to impose hefty tariffs on steel and aluminium imports.


That brought a stiff response from trading partners and criticism from the IMF and WTO.


EU trade chiefs have reportedly been considering slapping 25% tariffs on around $3.5bn (£2.5bn) of imports from the US, following Mr Trump's proposal of a 25% tariff on imported steel and 10% on aluminium.


They would target iconic US exports including Levi's jeans, Harley-Davidson motorbikes and Bourbon whisky, European Commission head Jean-Claude Juncker said.


What has Mr Trump said now?


In a tweet on Saturday, the president said: "If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US.


"They make it impossible for our cars (and more) to sell there. Big trade imbalance!"


A second tweet decried the "$800 Billion Dollar Yearly Trade Deficit because of our 'very stupid' trade deals and policies".


Mr Trump added: "Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!"


How many EU-made cars go to the US?


The US is the largest export market for EU cars - making up 25% of the €192bn (£171bn; $237bn) worth of motor vehicles the bloc exported in 2016 (China was second with 16%).


Germany is responsible for just over half of the EU's car exports, so new US tariffs would hurt the car industry there. But German carmakers also build hundreds of thousands of cars in the US every year - providing many US jobs that German officials say Mr Trump overlooks.

Why does he want to impose tariffs?


It chimes with his "America First" policy and the narrative that the US is getting a raw deal in its trade relations with other countries.


Mr Trump tweeted on Friday that the US was "losing billions of dollars" and would find a trade war "easy to win".


The president is using a clause in international trade rules which allows for tariffs for national security reasons.


But his move has not come totally out of the blue.


The commerce department recommended tariffs in February after conducting a review under rarely invoked national security regulations contained in a 1962 trade law.


Mr Trump had already announced tariffs on solar panels and washing machines in January.