Trump, EU, tariffs

Trump steps up war of words over trade tariffs

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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.

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!”

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.

A number have questioned the wisdom of the tariff proposal and have been urging the president to reconsider.

Senator Orrin Hatch said: “I’m very surprised, he’s had very bad advice from somebody down there. The people who are going to have to pay these tariffs are going to be the American citizens.”

Senator Ben Sasse said: “Kooky 18th Century protectionism will jack up prices on American families – and will prompt retaliation.”

And industry bodies like the US Motor and Equipment Manufacturers Association have expressed deep concern, saying the benefits from the recent cuts in corporation tax “could all be for naught”. -BBC

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