Published: Thu, July 05, 2018
Markets | By Terence Owen

Of boomerang effect if Trump imposes car levies

Of boomerang effect if Trump imposes car levies

European Union officials are claiming President Trump's new tariffs on vehicle imports could cost the US economy up to $14 billion.

The group's analysis of the harm each U.S. state could suffer from retaliation by USA trading partners painted a gloomy picture that could bring pressure on the White House from Republicans ahead of congressional elections in November.

Perhaps most unsettling to businesses and investors, Washington and Beijing have engaged in tit-for-tat tariffs and threatened retaliation that has raised the prospect of a trade war between the world's two largest economies.

The European Union has claimed that Donald Trump's plans to impose higher import taxes on cars to the U.S. would harm his own country's economy. However, "even if we don't get into a trade war, all this protracted uncertainty might have an impact on confidence", said Dall'Angelo.

Tom Donohue, president of the U.S. Chamber of Commerce, is launching a new campaign to oppose Trump's trade tariff policies.

He said, "They send a Mercedes in, we can't send our cars in".

Canada s retaliatory tariffs take effect Sunday against American products including Florida orange juice, ketchup and Kentucky bourbon.

The Caixin/Markit Manufacturing Purchasing Managers' Index fell slightly in June in China to 51 as new export orders dropped for the third month in a row.

"That standard is simply not met here, as imports of vehicles and parts from countries like Canada, which has been defined by law as part of the USA defense industrial base and which has been closely integrated with US automotive production since the U.S".

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Last month, the European Union imposed tariffs on American goods worth United States dollars 3 billion such as yachts, bourbon and motorcycles.

The analysis was compiled using data on state exports from the U.S. Department of Commerce and data on U.S. exports subject to foreign tariffs from the official government sources of China, the EU, Mexico, and Canada.

ENERGY: Oil futures recovered from the previous day's downtick, after Trump claimed that Saudi Arabia could produce up to double of the 1 million barrels-a-day increase agreed by OPEC countries.

Trump has levied heavy tariffs on steel and aluminum, on the grounds of national security, on all but a few nations, levied duties on China over the alleged theft of intellectual property and is also considering taxes on imported automobiles.

Mr. Trump's administration wants Germany - which would be hardest hit by automotive tariffs - to pressure the European Union to come to an agreement. The US imported over $US43 billion worth of vehicles for people transportation in 2017.

On Monday, the European Union warned that $300 billion in USA exports could be hit by retaliatory tariffs.

For example, the Chamber said Texas could see $3.9 billion worth of exports targeted by retaliatory tariffs; Tennessee, $1.4 billion; and SC, $3 billion.

"We'll spare no effort, be it at the technical or political level, to prevent this from happening", a spokesman for the Commission told reporters, adding that Commission President Jean-Claude Juncker's trip to Washington later this month would seek to stop any new United States tariffs.

Its tariffs are meant to deliver pain to American farmers, who overwhelmingly backed Trump in the 2016 election and whose interests are represented by powerful lobbyists and members of Congress.

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