European Union imposes tariffs on USA peanuts, motorcycles and whiskey

Devin Lawrence
June 22, 2018

Donald Trump has threatened a 20% tariff on all European cars if the EU does not remove trade barriers introduced on Friday.

Trump also previously revealed to French President Emmanuel Macron that he wishes to raise levies on imported cars to 25% and obliterate European luxury vehicle sales in the US.

"Our baseline assumption is that automotive tariff threats are being used as a negotiating tactic", wrote Jeff Schuster, president of forecasting for industry analyst LMC Automotive, in a blog post."However, risk is mounting that this ploy could backfire and further escalate into something more permanent, or an outright trade war".

The spat is part of a wider tussle over global trade.

The total amount of United States goods exported to China amounted to only US$130 billion (S$177 billion) previous year, meaning that Mr Trump's potential tariffs on US$250 billion or more of Chinese imports can not be matched, at least directly. Tariffs for those materials now stand at 25% in a move to protect local producers.

The tariffs come weeks after the Trump administration implemented a 25 per cent tariff on steel and 10 per cent tariff on aluminium imports in March.

The majority of U.S. goods targeted by the European Union, such as tobacco, Harley Davidson motorcycles, cranberries and peanut butter, will now carry a tariff of 25%.

European vehicle manufacturers including BMW and Mercedes Benz have a large presence in the US. Most imports come from Asia, but several European brands, including Land Rover, don't have USA factories.

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"He's right, we make great cars in the United States".

The EU exported some 5.5 million tons of steel to the US previous year. Of those cars, just over half were exported by German auto makers.

Nearly 1 million are tied directly to auto and parts manufacturing, according to the Bureau of Labor Statistics.

The new duties have been imposed as tensions over trade continued to grow between the USA and China.

Together with USA tariffs against Mexico and Canada, the trade battles have raised the spectre of a global trade war, spooking financial markets that fear major consequences to the global economy.

"We oppose the act of extreme pressure and blackmail by swinging the big stick of trade protectionism", a China's Commerce Ministry spokesman said Thursday. Most of the units imported from Germany are premium cars, which tells a lot about the position of American vehicle industry in the premium market.

The action covers 42 "exclusion requests" from the seven companies, including razor maker Schick Manufacturing Inc. of CT, cutting tool maker Nachi America Inc. of IN and specialty steel supplier Hankev International Inc. of California. European automakers including Daimler, the maker of Mercedes, and BMW also sank following the tweet. It would also hurt the operations of Porsche, which imports all of its cars from Germany.

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