The imposition of trade duties on European cars could lead to US losses of $ 13-14 billion, Politico wrote citing a last week’s letter by the European Commission.
In late May, The Wall Street Journal reported that US President Donald Trump was mulling to slap 20% tariffs on European cars unless Brussels doesn’t remove tariffs and other trade barriers.
The next measure, in particular, may include spare parts for European cars that are manufactured in the US. European companies are assembling 2.9 million cars in the US, or 26% of the overall US car production. Of these, two-thirds are exported, including back to EU countries. Tariffs could undermine the American economy, European experts conclude.
Production by EU-owned companies in the U.S. “still amounts to 16 percent of national production and 1.8 million vehicles” – and that’s without Chrysler, which is now of European ownership.
The European Commission thus responded last Friday to a U.S. request for comment on the issue. According to letter, European analysts warn that an additional 25 percent import tariff on automobiles and automotive parts would badly hit American GDP while the current account balance of the US “would be not affected positively.
Also, Europe could suffer from the flaring up trade war between the US and China. Since June 1, the United States imposed tariffs on steel (25%) and aluminum (10%) imports. On June 22, the EU responded with 25% tariffs on American products, with annual exports of EUR 2.8 billion.