Despite world wide investor apathy the Trade War iniiated by U.S. President Trump is quickly escalating. French Finance Minister Bruno Le Maire on Sunday said “he question is no longer whether or not there will be a trade war, the war has already started”.
Despite world wide investor apathy the Trade War iniiated by U.S. President Trump is quickly escalating. French Finance Minister Bruno Le Maire on Sunday said “he question is no longer whether or not there will be a trade war, the war has already started”.
“If tomorrow there is an increase in tariffs, like in the car industry, our reaction should be united and strong to show that Europe is a united and sovereign power,”
“The question is no longer whether or not there will be a trade war, the war has already started,”
U.S. President Donald Trump hit the EU, Canada and Mexico with tariffs of 25 percent on steel and 10 percent on aluminum at the start of June, ending exemptions that had been in place since March. Trump has since escalated tensions with threats to impose a 20 percent import tariff on all EU-assembled vehicles, which could upend the industry’s current business model for selling cars in the United States. General Motors to that affect issued an earnings warnings last month on the effect it will have.
“Let it be known that if we are attacked we will react collectively and we will react firmly,” Le Maire said.
Existing Auto Tariffs
- The United States currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks.
- The EU imposes a 10 percent tariff on imported U.S. cars.
Under World Trade Organization (WTO) rules, the EU cannot lower import tariffs for only U.S.-made cars. It would have to reduce them for all WTO members.
While French carmakers would be little affected by U.S. tariffs because they have little exposure to the American market. Germany faces the biggest threat and Chancellor Merkel has said she is willing to negotiate.
However France would face strongcompetition from Asian producers if EU tariffs were cut.
Source: Reuters
From The Traders Community News Desk