European Union delivers stark warning to U.S. over auto tariffs

European Union delivers stark warning to U.S. over auto tariffs

The European Union warned on Monday that up to $294 billion worth of United States exports would face counter-measures if President Donald Trump went through with his threat to slap duties on auto imports.

In May, Trump ordered an investigation into whether imported cars and automotive components could pose enough of a national security risk to warrant tariffs of as much as 25%.

About $3.9 billion in Texas-produced exports are under threat due to President Trump's escalating trade war, according to a new study by the U.S. Chamber of Commerce. The EU, Mexico, Canada, Turkey and India introduced duties on USA products in return.

In its submission, the European Union said EU companies make close to 2.9 million cars in the United States, supporting 120,000 jobs - or 420,000 if cars dealerships and auto parts retailers are included.

"It is bad what they do to us", Trump said in a television interview Sunday, citing trade deficits and "the vehicle situation".

Oil prices also fell after US President Donald Trump put pressure on Saudi Arabia to increase oil production.

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The EU letter said, "In 2017, USA -based EU companies, produced close to 2.9 million automobiles, which accounted for 26 percent of total US production".

Pennsylvania: In total, $1.7 billion of state exports are threatened by retaliatory tariffs. However, "even if we don't get into a trade war, all this protracted uncertainty might have an impact on confidence", said Dall'Angelo. The EU has retaliated against those tariffs with measures of its own, which hit around 2.8 billion euros ($3.26 billion) worth of American-made products.

As well as the tariff threats, the European Commission is also believed to have warned Trump that his behaviour could "result in yet another disregard of worldwide law" by the USA, as well as saying that any auto tariffs would "damage further the reputation" of the country.

The trade strains were compounded by an European Union threat to hit the United States with retaliatory tariffs, lingering concerns over President Donald Trump's dislike for the World Trade Organization, and by data showing the weakest euro zone manufacturing growth in 18 months. In 2016, he introduced an economic strategy of "putting America first", saying that he would negotiate "fair, bilateral trade deals that bring jobs and industry back onto American shores". Trump has threatened more tariffs on hundreds of billions of dollars of additional Chinese goods, and floated the idea of tariffs on European cars. The Peterson Institute for International Economics calculates that 85 percent of the Chinese products to be hit by the initial Trump tariffs are machinery and components used in finished goods made in the United States. They don't want our farm products.

Those measures would apply "across sectors of the USA economy", the letter reportedly said.

European Union reportedly ready to hold talks with major vehicle manufacturers about a coordinated effort to cut pre-existing tariffs.

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