Once again Donald Trump has added to concerns for a potential trade war should no deal be reached between the European Union and the United States for tariffs on imports and exports.
He is currently reviewing a report from the US Department of Commerce that analyses whether imported vehicles and auto parts pose a threat to US national security.
Should this be the case Trump has 90 days to decide whether to impose tariffs which could be as high as 25%. At the moment the US imposes a tariff of 2.5% whilst the EU has a duty of 10%.
During his meeting with Austria’s Chancellor Sebastian Kurz, the president once again threatened tariffs should no deal be reached. “We are trying to make a deal. They’re very tough to make a deal with – the EU.” Trump said. “If we don’t make a deal, we’ll do the tariffs.”
EU trade ministers are meeting in Bucharest Thursday and Friday of this week to review the proposal. Volkswagen Chief Executive Herbert Diess, one of Europe’s biggest car producers, noted that import tariffs could cost VW billions of euros each year. But it’s not just the European economy that would suffer should the tariffs go ahead. The US-based Centre for Automotive Research announced earlier this week that over 370,000 jobs could be lost and up to 1.3m fewer car sales could happen in the US too.
Politicians in Brussels remained optimistic that a deal could still be reached. However, this will also now depend on the outcome of the report from the US Department of Commerce and how it is received by the President.
Compliments of Vulcan Consulting, member EACCNY