The U.S. President Donald Trump has threatened to ‘apply a tax’ on imports of cars from the European Union. Mr. Trump said because of the ‘very stupid’ trade deals the U.S. have with many countries, they (the countries) have taken advantage of the U.S. for years.
The U.S. is the largest export market for EU cars. According to a BBC report, the U.S. market makes up “25% of the €192bn (£171bn; $237bn) worth of motor vehicles the bloc exported in 2016 (China was second with 16%).”
The war of words over trade began with Trump vowing to impose tariffs on steel and aluminum on Thursday.
President Trump’s move was criticized by the U.S. trading partners including the European Union. The EU in response to President Trump’s move said it has been considering of a 25% tariff around $3.5 bn of imports from the U.S.
If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!
— Donald J. Trump (@realDonaldTrump) March 3, 2018
The International Monetary Fund (IMF) said in a statement, “The import restrictions announced by the U.S. President Donald Trump are likely to cause damage not only outside the U.S. but also to the U.S. economy itself, including to its manufacturing and construction sectors, which are major users of aluminum and steel.”
“The WTO is clearly concerned at the announcement of US plans for tariffs on steel and aluminum. The potential for escalation is real, as we have seen from the initial responses of others,” WTO Director-General Roberto Azevedo said in a statement.
President Trump, however, stepped up his trade wrangle in a tweet saying “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!”
President Trump added more in his second tweet in a row, “$800 Billion Dollar Yearly Trade Deficit because of our ‘very stupid’ trade deals and policies. 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!”
Meanwhile, Mr. Trump’s rhetoric has been criticized by the fellow Republicans. 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.”
Wilbur Ross, the Commerce Secretary of President Trump, however, has firm support for Trump’s plan. He said the President was “fed up with the continued over-capacity, he’s fed up with the subsidization of exports to us.”
Earlier Mr. Trump said the U.S was losing billions of dollars with ‘a certain country’ and in this situation “trade wars are good and easy to win.”
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!
— Donald J. Trump (@realDonaldTrump) March 2, 2018
His comment, however, drew immediate reaction from WTO. World Trade Organization Director-General Roberto Azevedo said: “A trade war is in no-one’s interests.”
The Canadian Prime Minister Justin Trudeau said the proposed tariffs were ‘absolutely unacceptable’ and he is “confident we’re going to continue to be able to defend Canadian industry”.