EU says Trump car tariffs 'will put a tax on the US people'
S E E D E D C O N T E N T
European commission hits back at president, threatening tariffs on $300bn of US goods
Donald Trump will put a “tax on the American people” if he goes ahead with a threat to hit European carmakers with punitive tariffs, the European Union has warned.
In a hard-hitting paper, the European commission said Trump’s tariffs would be “self-defeating and would weaken the US economy”, estimating that almost $300bn (£228bn) worth of US goods could be hit by countermeasures.
Donald Trump has threatened punitive tariffs against imports of
European vehicles such as these Mercedes-Benz cars.
Focke Strangmann/EPA
The warning comes in the commission’s first detailed response to the US department of commerce following Trump’s threat to hit imports of European cars with tariffs.
“The European Union is possibly as bad as China, only smaller,” the US president told Fox News on Sunday. “They send a Mercedes in, we can’t send our cars in,” he claimed.
The EU imposes a 10% tariff on US-built cars, while the US levies a 2.5% tariff on cars assembled in Europe and a 25% tariff on European-built vans and pick-up trucks.
The US leader promised to unleash tariffs on European car imports after the EU retaliated against his tariffs on steel and aluminium, sparking fears of a trade war that pushed stock markets around the world into the red on Monday.
In a sign of the EU’s deepening alarm about Trump’s unilateral approach, the paper argues that the White House is again risking the US’s international reputation.
“The European Union would therefore caution the United States against pursuing a process which could result in yet another disregard of international law, which would damage further the reputation of the United States and which the international community cannot and will not accept.”
EU leaders who met the US president at a tense G7 summit in Canada were rattled by Trump’s disregard for the post-1945 world order, his mocking tone and bellicose rhetoric.
That summit did lead to an invitation from the White House to Jean-Claude Juncker, the European commission president, to visit Washington. Juncker is due to meet Trump in Washington before the end of July, a Brussels spokesman confirmed on Monday.
Speaking last month about his recent encounter with the US president, Juncker said Trump had told him: “Jean-Claude – you are a brutal killer.’” Juncker, a former prime minister of Luxembourg, added: “I think he meant it as a compliment but I am not sure.”
According to the commission analysis, European carmakers in the US produce 2.9m cars, about 26% of US production, supporting 120,000 US manufacturing jobs and 420,000 dealership jobs. EU-owned companies in the US export 60% of their production, helping the country’s trade balance, the paper states.
Some European observers expect Trump to announce his decision on car tariffs before the midterm elections in November, in a bid to boost the chances of Republican candidates running for Congress and in state elections. The US commerce department is due to hold hearings on car tariffs in July and expected to complete its investigation into car imports later this summer.
European carmakers are worried that escalating measures will play havoc with global supply chains, damaging companies on both sides of the Atlantic. “I am hoping that when … it becomes very obvious that even US industry doesn’t want this, that that would give pause for thought and perhaps a reconsideration of the measures,” Jonathan O’Riordan, the international trade director at the European Automobile Manufacturers Association, said. “However, we are concerned.”
In its latest paper, the EU steps up its criticism of the US for using national security as the reason for sanctions, asserting that this argument is baseless and “harms trade, growth and jobs in the US and abroad, weakens the bonds with friends and allies, and shifts the attention away from the shared strategic challenges that genuinely threaten the market-based western economic model”.
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Lemme see... more pickups are sold than cars in the US, but let's keep it simple and say they're the same. Then 25% + 2.5% / 2 = 13.75% average tariff for EU products headed for the US, as compared with 10% in the other direction.
So... there are two possibilities:
- Trump doesn't know what he's talking about (which is always a good bet in all circumstances), and doesn't care because he knows his Unthinking Faithful TM will believe any crap he feeds them
- Trump does know, and is lying through his teeth because his Unthinking Faithful TM will believe any crap he feeds them.
Basically, Trump always depends on the fact that his Unthinking Faithful TM will believe any crap he feeds them.
The EU has a 10% tariff on auto imports and the US HAS A 25% TARIFF ON IMPORTS OF LIGHT TRUCKS, VANS AND SUV'S FROM EUROPE.
What is the biggest seller in the US....LIGHT TRUCKS...
The largest exporter of autos/suv's from the US is BMW...
It doesn't take a brain surgeon to see how this is going to turn out. Or maybe it does.
I know why the EU doesn't say the car tariffs put a tax on the EU people.
It would be nice if both sides get rid of the tariffs. LBJ's tax on the American people has done enough damage already and so have the EU taxes on the EU people.
Foreign-made pickup trucks are subject to a 25 percent import tariff, a policy heartily endorsed by U.S. producers. So a foreign truck valued at $20,000 costs the importer $25,000 before he can even clear customs. Meanwhile, domestic producers of $20,000 pickups have an artificial $5,000 cushion, enabling them to increase prices without appearing out of line.
At 25 percent, the import tariff is virtually prohibitive. In 2001, fewer than 7,000 pickups were imported from outside North America. That’s only 0.23 percent of almost 3 million purchased. Without imports, supply is smaller, choices are fewer, and domestic producers are the only game in town. It’s a veritable sellers’ market, sanctioned under official U.S. policy. And truck buyers — if you’ll pardon the pun — carry the load
If I remember correctly there were three products as part of the ''Chicken tax'' the only one that has been sustained by both parties for close to 60 years is the tax on light trucks/vans/suv's. That in inself is very telling.
You hit the nail on the head Dean. I know that we don't agree on a whole lot but it seems when it comes to trade we are on the same side.
I've looked at the prices on new trucks, Chevy/Ford/Ram...It'a damn near impossible to find one for under $35,000. That is crazy IMO.
Diesel is a whole different animal. The up charge for a diesel is nuts. I was talking about a light duty F150 gas engine or the like for $35,000, damn near impossible to find.
All of our thinking about tech, and fuels , and all... is false, because the numbers we use are artificial.
We think of alternative energy as "subsidized", but petroleum is the most subsidized of all industries. Pump prices have little or nothing to do with the real-world cost of petroleum, which joyfully ignores its environmental costs while collecting its subsidies.
If Big Oil was required to keep its process environmentally neutral, and didn't get its subsidies, gasoline would cost upward of fifteen dollars per gallon at the pump... not including any taxes which might logically be added to pay for infrastructures. Diesel might cost a bit less, since it requires less refinement, but the difference is marginal.
A $15/gallon world... wouldn't look anything at all like the world we actually have. Big Oil has literally shaped the world to its financial advantage.