Trade War Watch: Trump's Not Letting Up on Europe's 10 Percent Solution

Matt Posky
by Matt Posky
trade war watch trumps not letting up on europes 10 percent solution

The past week has seen a flurry of trade trade announcements — none of them particularly promising for the United States. After a brief moment where President Donald Trump’s tariff threats seemed to have a positive impact on the European Union, Germany threw new support behind China as the People’s Republic issued a stunningly large 40-percent retaliatory tax on vehicles imported from America.

While Europe and the U.S. still might work out a zero tariff deal on automobiles, the recent activity has led Trump to respond with another warning. He now claims if the region cannot engage in fair trading practices with the United States, he’ll further restrict imported cars.

The president is scheduled to discuss trade with European Commission President Jean-Claude Juncker in Washington later this month, and the matter will assuredly be a central topic.

“That’ll change also and I think we’ll see that because on the 25th of July they’re coming in to start negotiations with me. We’ll see,” he said after a meeting with NATO leaders. “And if they don’t negotiate in good faith we’ll do something having to do with all the millions of cars that are coming into our country and being taxed at a virtually zero level, at a very low level … I think it’s been a very effective way of negotiating, but I’m not negotiating, I just want fairness for the United States.”

Currently, United States taxes imported vehicles at 2.5 percent and light trucks at a less-fair-sounding 25 percent. Europe has its vehicle import tariffs set at a relatively flat 10 percent.

The U.S. Senate opposes the president’s proposals to raise car tariffs on the grounds of protecting “national security.” In a 88-11 vote Wednesday, it approved a symbolic motion backing a role from Congress in ratifying the imposition of such tariffs. But the key words there are symbolic and motion; there’s no authority behind it.

Trump’s recent gripes seemed to be in response to his assumption that U.S. farmers are losing ground in terms of exports, though he also cited Germany’s energy deal with Russia and the increasingly large influence China has in the region. The NATO trip also saw him telling allies they need spend more on their own defense if they’re not interested in working together on matters of trade. His big play for now, however, remains automotive in nature. If Europe can’t play on terms he finds favorable, he’ll strike out at its most profitable industry.

[Source: Reuters]

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  • Ernest Ernest on Jul 14, 2018

    @ Big Al At the risk of sounding obnoxious, consider a few points. 1. We really don't care what the EU thinks- in particular, Britain and Germany. Odd as this may sound, I think there's excellent odds Trump will be working with new PM's from both countries before it goes the other way around. 2. While Trump struggles with diplomacy, he has tapped into some deep feelings inside of his own borders. That's going to make some of these decisions harder to unwind over time (without judgement of their merits).

    • See 6 previous
    • Inside Looking Out Inside Looking Out on Jul 15, 2018

      @Big Al from Oz "Because it ain’t Europe. Its the US that will ultimately fail. " Really? And how? Europe cannot even defend itself, European army is not functional and EU can fall apart easily and quickly. Do not forget also about population explosion in Africa that is coming soon - there will be billions of hungry people trying to migrate to Europe. Syria is a small country and Europe could not handle wave of few million of migrants well. How EU will be able to accommodate several billion migrants from African countries?

  • Ernest Ernest on Jul 14, 2018

    @ Big Al: "The US is now the smallest market as everyone else is more advanced at integration across the who spectrum of business, economics, science, etc." I'm not sure what metric you're using there, but it doesn't exist on this planet. I don't want to sound pro-Trump (or anyone else). I'm a pragmatist when it comes to my worldview. When the asteroid hits tomorrow, what other land mass would be better equipped to survive the aftermath than the US? @ Arthur Dailey: that's the point I was making. Good, bad, or otherwise, we're witnessing a powerful pushback to 8 yrs of Progressivism. As it's playing out, the pushback is quite a bit stronger than anyone anticipated. Trump never should have won, he should have been impeached, policies stopped... and so on. Hasn't happened- just the opposite actually. Never Trump Republicans are out looking for a party to hand their hat on, and Democrats are running in circles trying to find a strategy that works. Newsflash- they haven't found one yet. We live in interesting times.

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    • Ernest Ernest on Jul 15, 2018

      @ Al. "Stock market and real economy are two different animals..." Of course they are. That's why I said pull up a 10 yr chart and look at the patterns, not the numbers. Studying the patterns tells you the story. The numbers are only good for the 6:00 news. Re market has nothing to do with an economic system... got that. Respectfully, you need to remember many of us here are quite a bit more educated, well read, and financially saavy than you think we are. And some of your comments go so far over the top, I can instantly spot that you aren't quite as informed as you might think on occasion. ;-)

  • Dave M. Although the effective takeover by Daimler is pooped upon, this is one they got right. I wasn't a fan of the LHs, mostly due to reported mechanical, NVH and build quality issues, but I though Chrysler hit it out of the park with the LXs. The other hyped release that year was the Ford Five Hundred, which, while a well-built car with superior interior space, couldn't hold a candle to the 300.
  • Art Vandelay I always liked those last FWD 300's. Been ages since I've seen one on the road though. Lots of time in the RWD ones as rentals. No complaints whatsoever.
  • Cardave5150 I've had 2 different 300's - an '08 300SRT and an '18 300C. Loved them both a LOT, although, by the time I had the second one, I wasn't altogether thrilled with the image of 300's out on the street, as projected by the 3rd or 4th buyers of the cars.I always thought that the car looked a little stubby behind the rear wheels - something that an extra 3-4" in the trunk area would have greatly helped.When the 300 was first launched, there were invitation-only meet-and-greets at the dealerships, reminding me of the old days when new model-year launches were HUGE. At my local dealer, they were all in formalwear (tuxes and elegant dresses) with a nice spread of food. They gave out crystal medallions of the 300 in a sweet little velvet box (I've got mine around the house somewhere). I talked to a sales guy for about 5 minutes before I asked if we could take one of the cars out (a 300C with the 5.7 Hemi). He acted like he'd been waiting all evening for someone to ask that - we jumped in the car and went out - that thing, for the time, seemed to fly.Corey - when it comes time for it, don't forget to mention the slightly-stretched wheelbase 300 (I think it was the 300L??). I've never found one for sale (not that I've looked THAT hard), as they only built them for a couple of years.
  • Jkross22 "I’m doing more for the planet by continuing to drive my vehicle than buying a new one for strictly frivolous reasons."It's not possible to repeat this too much.
  • Jeff S Got to give credit to Chrysler for putting the 300 as a rear wheel drive back on the market. This will be a future classic.
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