Trump is Talking Tariffs Again, Takes Aim at European Cars

Matt Posky
by Matt Posky

President Donald Trump amplified his earlier threat of a global trade war this weekend by suggesting he would impose a tax on European cars if the EU countered his proposed steel and aluminum tariffs. On Thursday, Trump called for a 25 precent import tariff for steel and a 10 percent fee on aluminum in the hopes it would bolster those industries domestically. Europe responded by threatening a tax on imported bourbon, blue jeans, and American motorcycles. Apple pie and baseball were not mentioned, but you get the idea.

European Union officials clearly wanted to send a message to the president to back down. Instead, he came back even harder in a tweet from Saturday. “If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S.,” he wrote. “They make it impossible for our cars (and more) to sell there. Big trade imbalance!”

The United States currently imports over 1.2 million European cars from Europe, according to the European Automobile Manufacturers Association. The overwhelming majority of these vehicles from from German automakers under BMW Group, Volkswagen Group, and Daimler. Trump advisor Peter Navarro has repeatedly brought up the $65 billion U.S. trade deficit with Germany and has accused the country of unfair automotive deals, supplier control, and using the European Union as a cover not to negotiate.

“I think that it would be useful to have candid discussions with Germany about ways that we could possibly get that deficit reduced outside the boundaries and restrictions that they claim that they are under,” Navarro told the National Association for Business Economics roughly a year ago.

Presently, the United States imposes a 2.5 percent tariff on the import of all foreign cars and a 25 percent tariff on the import of foreign trucks or vans. Meanwhile, the E.U. has a flat 10 percent tax on all vehicles imported from the U.S.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Ricky Spanish Ricky Spanish on Mar 05, 2018

    Steel and aluminum tariffs will negatively impact domestic manufacturers who import said steel and aluminum to build things here, in America. It will encourage them to outsource that production to whatever nation has the cheapest steel and aluminum so that they can reduce both the material costs and the transportation costs. And any additional costs will be passed on to us, the consumer.

  • Jthorner Jthorner on Mar 06, 2018

    As others have said, tariffs on imported steel and aluminum will drive manufacturing out of the US unless comparable tariffs are charged against imported products made of steel and/or aluminum. The automotive thing between the US and Europe should be comparable. If the EU charges 10% on an imported vehicle the the US should charge 10% on an imported EU made vehicle. 10% going in one direction and 2.5% coming in the other direction is not fair or reasonable. The US and EU have similar environmental and labor regulations, so that aspect is roughly fair.

    • See 2 previous
    • DenverMike DenverMike on Mar 06, 2018

      @BAFO - It really is that simple. We're getting boned by Europe as usual. The only question is, should we keep taking it. And oops once again you forgot to mention Europe's 22% chicken tax on US Vans and pickups. USA CAFE/CARB/NHTSA/etc were set up from scratch simply to improve the lives/health/safety of Americans and for no other reason. Same as "Lemon Laws". No direct ill intentions towards imports. Hey what's up Mahindra? However, Europe came up with their own similar regulations after the fact, except their's have the added intention of protecting their domestic automakers by differing just enough, and obviously pushing, basically pimping diesel engines on the public, but that's another story. But it is comical how EU automotive regulations zig everywhere US regs "zag". It's a devious plan, and even if it inadvertently shoots EU automakers in the foot when it comes to exporting their vehicles, it makes them way more cash on the front side, billions more likely. And the US get automatic access to the best or most popular autos the EU has to offer, for what EU consumers pay or less. It sounds like a lopsided "deal" if I've ever heard one! Aside from US automakers, including Subaru/Mazda/Toyota/etc, really European consumers are getting screwed the most, whether they realize it or not. Maybe we should keep that little fact between us... Ouch!!!

  • John The answer is to wipe it off? I don't recall ever having to "wife off rust" in any car I've ever owned. Well... once a year claybar for rail dust maybe.
  • Scott What people want is the Jetson Car sound.This has come up before.
  • Joerg I just bought a Corolla Cross Hybrid SE a few weeks ago, and I regret it. But not for any of the reasons stated so far. It drives well enough for me, gas mileage is great for a car like that, the interior is fine, nothing to complain about for normal daily use. I bought this relatively small SUV thinking it is basically just a smaller version of the RAV4 (the RAV4 felt too big for me, drives like a tank, so I never really considered it). I also considered the AWD Prius, but storage capacity is just too small (my dog would not fit in the small and low cargo space).But there are a few things that I consider critical for me, and that I thought would be a given for any SUV (and therefore did not do my due diligence before the purchase): It can’t use snow chains per the manual, nor any other snow traction devices. Even with AWD, snow chains are sometimes required where I go, or just needed to get out of a stuck situation.The roof rack capacity is only a miniscule 75 lbs, so I can’t really load my roof top box with stuff for bigger trips.Ironically, the European version allows snow chains and roof rack capacity is 165 lbs. Same for the US Prius version. What was Toyota thinking?Lastly, I don’t like that there is no spare tire, but I knew that before the purchase. But it is ridiculous that this space is just filled up with a block of foam. At least it should be made available for additional storage. In hindsight, I should have bought a RAV4. The basic LE Hybrid version would have been just about 1k more.
  • MaintenanceCosts Looks like the best combination of capability, interior comfort, and subtle appearance can be achieved by taking a Laramie (crew cab, short bed, 4x4 of course) and equipping it with the Sport Appearance, Towing Technology, and Level 2 packages as well as a few standalone options. That's my pick.Rebel is too CRUSH THAT CAN BRO and Limited and up are too cowboy Cadillac.
  • Xidex easier to buy a mustang that already sounds like that. love the coyote growl