European Union slaps revenge tariffs on United States as trade war erupts

US President Donald Trump speaks with the press | Mandel Ngan  AFP via Getty Images

President Trump on Friday threatened to unilaterally impose a 20 percent tariff on all automobile imports from Europe, further breaking from Republicans in Congress and front-running an investigation he had ordered from the Commerce Department into whether these imports harm the U.S.'s national security.

"By linking the threatened imposition of USA tariffs to European Union tariffs imposed on US autos, the President has both short-circuited the 232 process and conclusively undercut the stated national security rationale of that investigation", said Daniel Price, a former senior economic adviser to President George W. Bush.

"The rules of worldwide trade, which we have developed. with our American partners, can not be violated without a reaction from our side", Commissioner for Trade Cecilia Malmström said. The deadline for completing the investigation is February, 2019, but USA commerce secretary Wilbur Ross said on Thursday that the department aims to wrap up the probe much earlier, by late July or August.

The goods targeted include typical American products like bourbon, peanut butter, and orange juice, in a way that seems designed to create political pressure on U.S. President Donald Trump and senior U.S. politicians. If the WTO rules in its favor, or after three years if the case is still going on, the European Union plans to impose further tariffs of 3.6 billion euros on US products. "The United States decision to impose targets on Europe goes against that, in fact it goes against all logic and history", European Commission President Jean-Claude Juncker said on Thursday. Thus, it's unclear what problem Trump's vehicle tariff is supposed to solve - unless the president believes that auto prices in the US are intolerably low.

Cohn said he understand Trump's rationale, but added that restricting vehicles to ones made in the U.S.is not realistic.

This was the process undertaken last month when Trump raised tariffs for steel and aluminium imports.

The E.U.'s retaliation is relatively modest - Trump's tariffs had hit roughly $7.5 billion of European products.

Japanese vehicle makers accounted for 92,000 jobs in the USA, according to the Japanese Auto Manufacturers Association's annual report.

President Donald Trump has fueled trade war fears by pledging to impose tariffs of 20pc on imports of European Union cars if trade barriers are not "broken down". BMW is one of South Carolina's largest employers, with more than 9,000 workers in the state.

Canada and Mexico have also announced their own similar countermeasures just as an even greater trade skirmish pitting the U.S. against China deepens.

Economists noted that the amount of money involved with India's levies dwarfed in comparison with that of China - U.S. -India trade was $126 billion previous year, while U.S.

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