Trump threatens 20pc tariff on all imported EU cars
- Author: Rogelio Becker Jun 24, 2018,
Jun 24, 2018, 16:49
Protectionism not only became history, it was also being considered as a curse. He told automakers at a White House meeting in May he was planning tariffs on some imported vehicles.
Why is the USA imposing tariffs? Mattes also said German automakers could not subsist without access to the USA market. Say an American retailer buys 100 garden umbrellas from China for $5 apiece, or $500.
The US may justify the auto tariffs on the grounds of national defense, just as it did in March when imposing duties on global imports of steel and aluminium. While steel and aluminium exports from India to the USA will face higher duties, India has chose to hit back with tariff hikes on 29 products imported from the US. The Wall Street Journal reported that Richard Grenell, the US ambassador to Germany was to present the offer to Trump this week.
On April 2, 2018, China retaliated with new tariffs on 128 categories of products, including pork, fruit and nuts, steel pipe for the oil industry, and ethanol.
He pledged to impose tariffs on imports from countries he said had exploited the US. Note: For trade data not available from China's Customs and MOC statistics, we use US Census data as references.
What could be the impact of trade war? The country's close ties to the stock market in China and attempts to boost stock prices over the last three years, is likely to suffer as the threats of increased tariffs continue.
He is especially irked by the hefty deficits in USA trade with China and Mexico, but has indicated that he will not let any country "take advantage of us on trade anymore".
The country is the priority customer for ballooning USA shale industry. According to the Peterson Institute for International Economics, a 25% tariff on imported autos to the U.S. would result in the loss of 195,000 United States auto workers' jobs. "We made a commitment because it is good for us - and good for the world - and we will stick to those commitments".
Incentive to increase production always comes from increase in demand, of which global demand is very vital.
The measures, aimed at propping up the American steel industry during full restructuring, affect almost 29 percent of imports.
The EU trade commissioner, Cecilia Malmström, said this week the 28-nation bloc was left with no other choice but to impose tariffs of its own after the "unilateral and unjustified decision of the US". India's export to US is almost 15 percent of its total exports.
It remains unknown whether China's existing investments in the United States will be impacted by the new rules.
Economists have no set definition of a trade war. The US is even imposing restrictions on immigration of Indian people by bringing changes in their visa rules.
The measures do boost the production of tin-plates in the U.S. - but also fan inflation.
War has to be seen as war only.
The US trade deficit has increased in recent years, running at around $50 billion (£38bn).
The comparable figures for Mexico and China are higher: Both have higher duties that top 4 percent. We may have to impose protective tariff on Chinese imports.
This week, Daimler told investors that it was bracing for a trade war between Trump, China, and now Europe, and issued guidance for lower profit expectations based lower sales due to escalating tariffs. However, this is also true that most of our imports from America are high technology imports, such as nuclear reactors, boilers and aircraft, reduction of which may go against our development efforts. Right now, the impact is not much: the $240 million revenue gain from taxing USA products will only match the losses India will suffer on exports to the US. The tariffs drive up the cost of imports.
Two things: Raise government revenue and protect domestic industries from foreign competition. We must understand that every cloud has a silver lining.
Traders remain concerned that the trade wars will start to spill over into other countries.
Trump's trade policies have also escalated conflict with Canada and Mexico as he seeks to renegotiate the $1.1 trillion North American Free Trade Agreement on terms more favourable to Washington.