Auto trade group decries Pres. Trump's tariff threat

US President Donald Trump

US President Donald Trump

More than $3 billion worth of USA 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.

Trump's tweet came hours after the European Union imposed tariffs on about $3.3bn of American products in response to his barriers to imported aluminum and steel. Tariffs on a further €3.6 billion worth of USA goods will be imposed after three years or earlier if the WTO rules in the EU's favour.

German automotive stocks fell after U.S. President Donald Trump threatened to impose a 20 percent tariff on all European auto imports into the U.S.

On May 23, Trump instructed Commerce Secretary Wilbur Ross to investigate whether or not auto imports "threaten to impair the national security".

The European Union has a 10 percent tariff on cars imported from the United States.

Of their US sales, BMW imported 70.8 percent from Europe, Mercedes maker Daimler 51.9 percent and Volkswagen 45 percent, according to LMC.

If Trump follows through, German automakers would likely respond by selling fewer vehicles in the US or increase prices sharply, Ellinghorst predicted. Shares of American vehicle companies Ford and General Motors also plunged following the threat, but have since bounced back. The White House has invoked the same rationale in assessing tariffs earlier this month on steel and aluminum imports.

So far, Congress has does done little to check Trump's authority in this area, but members with constituencies that are most vulnerable to rising tariffs expressed their concerns.

European Union trade officials have described the USA tariffs on steel and aluminum - justified by the Trump administration on grounds of national security -- as "illegal".

Tariffs against the remaining USA products valued at 3.6 billion euros (4.2 billion dollars) will take place at a later stage, either in three years' time or after a positive finding in WTO dispute settlement which may occur earlier. MORE, Trump's former top economic advisor said last week the president had expressed an interest in only having cars in the USA that were made here. BMW's plant in Spartanburg, South Carolina, is its largest in the world and exports almost 3 out of 4 SUVs it makes.

US President Donald Trump has become fixated on automotive trade, viewing it as a major irritant between the US and its trading partners in Asia and Europe.

Autos stocks fell on the news.

Germany's powerful auto lobby group is warning against an escalation of the trade dispute with the United States after President Donald Trump's latest threat to raise tariffs on imported cars. Instead of unilateral tariffs and going it alone, the USA should be working with, rather than against, its allies.

Pompeo made the comment as part of his prepared remarks at the SelectUSA Investment Summit just outside Washington, where he promoted the United States' business climate and investment opportunities, saying the country is "truly open for business". It followed his address to a "Make America Great Again" rally in Minnesota earlier this week, in which he denounced the European Union for saying "we're going to sell you millions of cars, by the way, you're not going to sell us any".

"It wouldn't take that much for financial markets to combine with businesses that are waiting to turn this into a big global event".

Turkey said Thursday that it's imposing tariffs worth $267 million on USA goods, targeting items such as coal, paper, walnuts, tobacco, rice, whiskey and cars.

The Australian dollar sank to a one-year low of A$ 0.7391 as the U.S.

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