EU hits back at Trump's threat to impose 20% US import tariff on European cars

Trump's tweet prompts fall in value of European car companies' shares; EC chief says EU will have "no choice" but to react to tariffs

Donald Trump

The EU has said it will retaliate if Donald Trump follows through on threats that America will impose a 20 per cent import tariff on European cars. Jyrki Katainen, the EU Commission's vice president of jobs, growth and investment told French newspaper Le Monde that "If they [America] decide to raise their import tariffs, we'll have no choice, again, but to react".

Katainen added, though, that: "We don't want to fight [over trade] in public via Twitter. We should end the escalation". His comments come after Donald Trump threatened to levy import tariffs of 20 per cent on European cars last week. The US president made the warnings on Twitter, claiming that if European “Tariffs and Barriers are not soon broken down and removed” America would “be placing a 20% Tariff on all of their cars coming into the US.”

Cars made in America and imported to the European Union countries are currently subject to import tariffs of 10 per cent, yet goods traded from Europe to the US only face a 2.5 per cent levy.

While the European Commission has previously voiced a desire to “remove these duties and other barriers to trade”, Trump's frustration at import boundaries appears to have provoked his latest warnings.

European automotive stocks fell an average of 1 per cent following Trump’s tweet, with BMW shares down 2 per cent, Mercedes down 1.4 per cent, and Volkswagen down 1.1 per cent, according to Thomson Reuters data.

The remarks from the president follow previous threats reported in the German media that Trump was threatening to impose a 25 per cent import tariff on European luxury cars.

Daimler, the parent company of Mercedes, issued a profit warning earlier this week following concerns over Trump’s trade disputes with China, which are set to see US import tariffs of 25 per cent placed on certain Chinese goods. This led to to fears China would impose retaliatory tactics, making US-made examples of the Mercedes GLE-Class, GLS-Class and C-Class more expensive to export to China.

Trump’s latest utterance is also thought to be related to fresh trade tariffs imposed by the EU on US goods like motorcycles, jeans and whiskey, themselves a reaction to US tariffs on EU steel and aluminium.

What do you think the future holds for European car imports to the US? Let us know in the comments...

Recommended

Electric car tax cuts needed to boost sales, says SMMT
BMW i5 - front static
News

Electric car tax cuts needed to boost sales, says SMMT

The Chancellor is under pressure to slash VAT on new EVs to provide a ‘fair tax for a fair transition’
1 Mar 2024
Plenty of UK car buyers still love a new car number plate
Volkswagen ID.7 - tailgate
News

Plenty of UK car buyers still love a new car number plate

Is a new number plate still the status symbol it once was? Our exclusive poll suggests that car buyers do care
24 Feb 2024
UK road maintenance work slashed by almost half in five years
Road resurfacing
News

UK road maintenance work slashed by almost half in five years

Council road repairs are down by 45 per cent compared to 2017/18, the latest data shows
24 Feb 2024
6,600 arrested in police annual drug and drink driving purge
Drink driving
News

6,600 arrested in police annual drug and drink driving purge

The Police ‘Op Limit’ campaign over xmas 2023 resulted in 6,616 arrests, with 14 per cent of over 50,000 tests showing positive results
22 Feb 2024

Most Popular

New Renault 4 will go 4x4 to get ahead in the baby EV SUV class
Renault 4EVER concept car in 1962 4L paint - front 3/4 static
News

New Renault 4 will go 4x4 to get ahead in the baby EV SUV class

The forthcoming Renault 4 is likely to offer a four-wheel-drive option, helping it to stand out in the market for baby all-electric SUVs
27 Feb 2024
Dacia heads for VW Golf and Ford Focus territory with new C-Neo that’s definitely ‘not an SUV’
Dacia badge
News

Dacia heads for VW Golf and Ford Focus territory with new C-Neo that’s definitely ‘not an SUV’

As big names vacate the traditional C-segment, Dacia sees an opportunity for its new petrol family car
27 Feb 2024
New MG2 will beat Volkswagen to the baby electric car market
MG badge
News

New MG2 will beat Volkswagen to the baby electric car market

MG has confirmed it is working on an entry-level electric car to rival Citroen e-C3 and new Fiat Panda
29 Feb 2024