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EU warns Trump: auto tariffs could lead to $300B retaliation

03 July 2018
EU warns Trump: auto tariffs could lead to $300B retaliation

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

The EU's letter reportedly said that it has not yet decided on countermeasures to possible auto tariffs, but said it is "likely" to apply them to "a significant volume of trade" in the event Trump imposes such tariffs.

The European Union, Canada and Mexico - all subject to tariffs on steel and aluminum exports to the USA - have also started imposing duties on American goods in response.

On Sunday, Canada - a country that, by the way, imports about as much from us as it exports in return - announced retaliatory tariffs against $12.6 billion of USA products.

Canada is the United States' second-biggest trading partner in goods, just behind China.

The European Union has reportedly threatened to retaliate against US President Donald Trump in the escalating trade conflict developing across the Atlantic.

"To be honest with you, Prime Minister Trudeau, I respect".

In its submission, the European Union argues that trade restrictions would likely to lead to higher costs for USA -based producers, and in effect become a tax on American consumers.

"In general, it was an attack on the president", Kudlow claimed.

Mr. Trump's administration wants Germany - which would be hardest hit by automotive tariffs - to pressure the European Union to come to an agreement.

"It's awful what they're doing to us", he said.

China is expected to impose a new 25-percent tax on soybeans in July. But Italy blocked their formal adoption until the migration issue was fully addressed. He dismissed suggestions that his attacks on the European Union were counterproductive. But he lifted the exemptions the same week he met with Group of Seven leaders in Quebec last month.

Retaliation for his tariffs came swiftly.

TARIFFS LOOM: The U.S. will start imposing a 25 percent tariff on $34 billion in Chinese imports this Friday.

Trump, however, has repeatedly defended his position, criticizing the European Union, Canada, and China on trade both during the Fox interview and at a recent rally in SC, where Trump went as far as to declare the United States the "piggybank" other nations like to take from. On Friday, Canada struck back at USA steel and aluminium tariffs, vowing to impose punitive measures on US$12.6 billion (S$17.23 billion) worth of American goods until Washington relents.

Global equities fell on Monday as investors anxious about an escalation of the trade disputes.

The commission said global retaliation against USA tariffs on auto imports would have a bigger impact on the U.S. economy than those provoked by the Trump administration's steel and aluminium tariffs.