Trump Threatens Europe with 20% Tariff on Cars

Following the imposition of tariffs on some American products by the European Union, Donald Trump, the President of the United States, threatened on Friday, June 21, that if these tariffs are not lifted, the United States will impose a 20% tariff on car imports from Europe. Trump tweeted: "If these tariffs and barriers are not soon removed and eliminated, we will impose a 20% tariff on all of their cars coming into the U.S. Build them here!" Trump's tweet came just hours after the European Union's decision early Friday to impose tariffs on certain American goods, including whiskey, jeans, and motorcycles worth $3.2 billion. The EU's action is essentially a response to the U.S. decision earlier this month to impose tariffs on European steel and aluminum. According to Reuters, the U.S. currently imposes a 2.5% tariff on passenger car imports from Europe, while the tariff on trucks and larger vehicles from Europe is 25%. Meanwhile, the EU imposes a 10% tariff on car imports from the U.S. The report states that several German automakers, including Daimler AG, Volkswagen, and BMW, have established factories to produce their cars in the U.S. Industrial data shows that German automotive factories operate in the southern states of the U.S. Following Trump's tweet, the stock value of European car manufacturers dropped by 1.25%. Trump has also threatened China with new tariffs on its exported products to the U.S. Previously, Trump expressed criticism of U.S. trade policies, stating: "People do not know how badly these countries have treated us." Earlier in June, the Trump administration imposed a 25% tariff on imported steel from Europe, Canada, and Mexico, and a 10% tariff on aluminum from those countries. The financial value of European steel and aluminum currently subject to U.S. tariffs amounts to 6.4 billion euros.