European Union warns U.S. of boomerang effect if Trump imposes vehicle levies

European Union warns U.S. of boomerang effect if Trump imposes vehicle levies

Schinas said European carmakers create over half a million jobs in the U.S.

The EU sent comments to the USA on whether motor imports pose enough of a threat to U.S. national security to justify tariffs and estimating the economic impact.

The fact that American auto manufacturers are urging President Trump not to tax (impose tariffs) us consumers any further is an indication of the complexity of trade and why tariffs are a 19th century policy tool that doesn't work in the 21st century world of long and involved supply chains. It was not immediately clear what those concerns are.

"EU tariffs on Harley-Davidson motorcycles exported from the U.S. have increased from 6 percent to 31 percent", Harley-Davidson said in its filing with the U.S. Securities and Exchange Commission.

European Union threatens to retaliate in growing trade war, if the United States places tariffs on European cars, the FT reports.

Previous year the European Union exported $43.6 billion worth of cars to the United States.

An escalation in the brewing trade war among the world's biggest economies threatens to deliver a £265bn blow to the global economy next year, new forecasts show, as the backlash grows against US President Donald Trump's protectionist policies. And China will promptly strike back with tariffs on an equal amount of USA exports.

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The Chamber based its state-by-state analysis on data from the US Department of Commerce and government agencies in China, the EU, Mexico, and Canada.

General Motors also warned that proposed tariffs on foreign cars and parts could result in fewer cars being built on U.S. soil.

It reported that manufacturers were "overwhelmingly" concerned about the impact of the tariffs imposed by the Trump administration on products including steel and aluminium.

According to the organization, half of all USA manufacturing jobs depend on exports, and 1 in 3 acres on US farms produce crops for the global market. Trump responded by threatening to put tariffs on even more items, including a 20% on vehicles from the EU. "They want to see if they can work something out, and that'll be good, and if we do work it out, that'll be positive, and if we don't, it'll be positive also, because..."

A report from Oxford Economics warned that tariff threats, if realized, would hit over 4 percent of world imports - a more than tenfold rise versus the 0.3 percent of imports hit by the new tariffs imposed so far.

The Association of Global Automakers, an industry group that represents worldwide automakers including Toyota, Volkswagen AG and BMW AG, said in a separate filing that "there is no support" for the idea that the import of vehicles and auto parts threaten the economic health of the USA auto industry. It said that auto imports from Europe to the United States had grown at the same pace as demand from the U.S. market, showing that they were filling a gap that domestic output could not, rather than eating into domestic sales as Trump has suggested.

And it anxious that the stakes are higher with auto tariffs. "There is no vehicle in the United States, whether from Toyota, GM, Ford, FCA, Daimler or Hyundai, that is sole-sourced from exclusively USA parts and components". The recent economic strain is likely to intensify as the effects of the heated China-U.S trade spat ripple through global supply chains.

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