Donald Trump threatens 20% tariff on European Union cars, targeting Germany

China and US trade talks

More than $3 billion worth of US goods - from bourbon and corn to Harley Davidson motorcycles - are now under a 25 percent tariff in the European Union, in retaliation for the Trump administration's tariffs that hit the EU, Mexico and Canada earlier this month.

It's worthing noting that, before Trump triggered a trade war, USA exports to the European Union faced an average tariff of just 3 percent; America's domestic carmakers were already highly profitable; and most major foreign automakers operate large plants in the United States.

Trump had directed the Commerce Deparment to launch an investigation into imported autos in May, similar to the procedure that led to the steel and aluminum tariffs.

Felipe Munoz, global analyst at JATO Dynamics, said: "While German-made cars accounted for 4% of Q1-18 USA sales, American-made cars made only 1.3% of German registrations in the first quarter. In 2017, 17.2m vehicles were sold in the USA, compared with 15.6m in the EU and European Free Trade Association countries.

The United States has granted exemptions to some products from Japan and four other countries from its additional tariffs on steel imports, the Commerce Department said Wednesday.

The German auto industry supports talks to reduce auto tariffs between the US and European Union, but only as part of a larger trade negotiation. The tariffs, mostly at 25 percent, are designed in part to "make noise" by targeting politically important states like Kentucky, Florida, and Wisconsin, EU trade commissioner Cecilia Malmstrom said.

U.S. President Donald Trump reacts as he sits on a truck while he welcomes truckers and CEOs to attend a meeting regarding healthcare at the White House in Washington, U.S., March 23, 2017. Trump imposed tariffs of 25 per cent on steel imports and 10 per cent on imported aluminium from the European Union on June 1.

Canada has announced it will impose retaliatory tariffs on C$16.6 billion (RM50 billion) worth of United States exports from July 1.

Another one of Trump's Friday morning tweets was directed at Mexico, and he took on a much friendlier tone than usual when discussing the NAFTA partner's trade and immigration policies. The new tariffs will go into affect August 4.

Nearly 1 million U.S.jobs are tied directly to auto and parts manufacturing, according to the Bureau of Labor Statistics.

Trump also previously revealed to French President Emmanuel Macron that he wishes to raise levies on imported cars to 25% and obliterate European luxury auto sales in the US.

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.

India had sought to be exempt from the new U.S. tariffs on steel and aluminum.

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