Tariff trade wars seem to be spreading, with the latest being triggered by Donald Trump’s proposed duties on European cars, which has seen the EU threaten to retaliate with its own list of tariffs targeting major U.S. companies.
As Reuters reports, following his well-publicised tariff trade war with China, Trump has threatened to impose tariffs on European car imports if the U.S. “is unable to reach a trade deal with the European Union.”
This warning was backed up by a confidential report sent to Trump by the US Commerce Department a few days ago, which “was expected to pave the way for the U.S. president to impose duties of up to 25 percent on imported autos and auto parts by designating them as a threat to U.S. national security.”
By way of response, the EU has drafted its own list of retaliatory tariffs which would affect prominent U.S. companies such as Xerox Corp and Caterpillar Inc. according to the European Commission, the list of products slated for tariffs “would go after €20 billion ($22.7 billion) worth of imports”.
The EU’s exports of cars and car parts to the U.S.A. are worth a reputed €50 billion ($56.8 billion) yearly, with the majority of the exports hailing from Germany.
“Should there be tariffs on cars and car parts, we don’t know, but if it happens we have started internally to prepare a list of rebalancing measures,” EU Trade Commissioner Cecilia Malmstrom stated during a press conference held in Bucharest.
“There is full support to do this. Of course if it happens we would immediately publish that list for formal consultation,” she added.
Xerox has not yet issued a formal response to news of the proposed EU tariffs.
