Donald Trump threatens 20% tariff on all European cars

European Union to hit US with tariffs on $3.2 billion worth of imports

European Union to hit US with tariffs on $3.2 billion worth of imports

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".

But the European Union tariffs also come in addition to a historic decline in transatlantic relations, especially in the aftermath of the Group of Seven summit in Quebec earlier this month, when Trump withdrew the United States from a multilateral communiqué at the last minute.

"We're going to fix the problem of protectionism around the world, and we're going to fix it by making it more painful for those countries to do bad practices than to do the right thing, which is to lower the trade barriers and lower their tariffs".

The European Union will begin charging import duties of 25% on a range of USA products on Friday, in response to United States tariffs imposed on EU steel and aluminium early this month, the European Commission said on Wednesday.

The EU also has in reserve potential tariffs of 10 per cent to 50 per cent that it could impose on a further €3.6 billion of United States imports in three years.

The biggest exporters of cars to the USA are Canada and Mexico, followed by Japan and Germany. "However, the unilateral and unjustified decision of the U.S. to impose steel and aluminium tariffs on the European Union means that we are left with no other choice", the bloc's trade commissioner Cecilia Malmstrom said in a statement on Wednesday.

Trump threatened additional taxes on European cars if the EU chose to retaliate.

China is "fully prepared" to respond to any new list of U.S. tariffs, according to a commerce ministry spokesman, who said the nation will use a combination of quantitative and qualitative measures.

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The White House refused to exempt its traditional allies from worldwide tariffs on steel and aluminium, which Trump argues are necessary to protect USA jobs and industry.

Lim said: "This is going to escalate, with the United States especially looking at German cars". Trump is also looking at new tariffs on auto imports, opening a new front in the trade war.

The EU said that if the situation isn't resolved, or if the US responds with more tariffs, the EU said that it will add additional tariffs on 160 USA products worth $4.3 billion.

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. Bejing will respond in kind.

However, China accused the USA of an act of "extreme pressure and blackmail" and said it would respond with "strong countermeasures".

Trade representatives from India and the United States are set to meet in New Delhi next week.

The Commerce Department is allowing companies to request exemptions from the steel and aluminum tariffs - if they can show that the metals they need aren't available from Americans producers. Several weeks ago, he ordered Commerce Secretary Wilbur Ross to launch what's known as a "232" investigation. It expects to employ 2,000 people initially, eventually bringing the workforce up to 4,000, according to its website.

European consumers would be able to find "alternatives", European Commission vice-president for trade Jyrki Katainen said. Therefore, I don't want cars made oversees.

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