Trump threatens 20 percent tariff on imported 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

If the trade dispute continues or is not resolved by the WTO, the European Union could target a second batch of American exports worth around €3.7 billion ($4.3 billion).

The EU has today introduced retaliatory tariffs on €2.8 billion (US$3.3bn) worth of U.S. products - including American whiskey - in response to president Donald Trump's tax hikes on imported aluminium and steel. This led to to fears China would impose retaliatory tactics, making US-made examples of the Mercedes GLE-Class, GLS-Class and C-Class more expensive to export to China.

Daniel Gros, director for Economy and Finance at the Center for European Policy Studies, said that in a trade war everyone stands to lose, but the USA has put itself in a worse position.

The EU imposes a 10 percent tariff on imported USA cars. Industry data shows that German automakers build more vehicles in southern US states that voted for Trump in the 2016 presidential election than they ship to the United States from Germany.

On March 1, Trump announced that the USA would be imposing a global tariff on all steel and aluminum imports into the US, citing national security concerns.

He said Thursday that the Commerce Department hopes to complete the investigation by the end of July or August. Administration officials have said China should strengthen protections for USA companies' intellectual property, and reduce tariffs on US products.

Shares in BMW, Daimler, Porsche and Volkswagen each dropped more than 1%, before regaining ground.

Euro reforms will be backed by German coalition, lawmakers - Merkel
Swedish Prime Minister Stefan Lofven said it would be "very hard to reach a solution" on hosting asylum seekers next week. And then: " We don't want what is happening with immigration in Europe to happen with us! ".

The move against China could raise prices for American consumers and businesses and hit global supply chains for industries like carmakers and electronics.[ nL4N1TO1AX] Chinese reprisals have hit American farmers already.

At a hearing this week, Senator Orrin Hatch, a Republican from Utah, said he was "stunned" that the Trump administration was investigating the national security risk of vehicle imports, which is estimated to affect about $200bn worth of imports. Automotive News data shows about 7.2 percent of vehicles sold in the United States through May were assembled in Europe.

Trump has repeatedly singled out German automotive imports to the USA for criticism.

A group representing major US and foreign automakers has said it was "confident that vehicle imports do not pose a national security risk".

Cars made in America and imported to the European Union countries are now subject to import tariffs of 10 per cent, yet goods traded from Europe to the United States only face a 2.5 per cent levy.

He has previously expressed his distain at German luxury brands, particularly Mercedes-Benz, and its prominence in New York's Fifth Avenue.

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