European Union possibly as bad as China on trade

Donald Trump

President Donald Trump cited national security concerns for the previous tariffs.

The group's analysis of the harm each U.S. state could suffer from retaliation by USA trading partners painted a gloomy picture that could bring pressure on the White House from Republicans ahead of congressional elections in November. By disrupting supply chains, eroding business confidence and heightening uncertainty, a trade war, they say, could "push the economy toward full-blown recession" and jeopardize America's economic expansion - the second-longest on record.

"The threat of steep tariffs on vehicle and auto component imports risks undermining GM's competitiveness against foreign auto producers by erecting broad brush trade barriers that increase our global costs, remove a key means of competing with manufacturers in lower-wage countries, and promote a trade environment in which we could be retaliated against in other markets", the company said.

The comparison is particularly painful to Europeans, which are attempting to forge common ground with the Trump administration on the idea that the real danger to fair trade is China. "Tariffs that beget tariffs that beget more tariffs only lead to a trade war that will cost American jobs and economic growth".

Today's price action suggests bullish traders were not too shaken by the impromptu agreement between President Trump and Saudi Arabia to raise production.

On Friday, Canada's foreign minister announced that Ottawa plans to impose about $12.6 billion worth of retaliatory tariffs on us goods on July 1.

Those tariffs kicked in on Sunday. Pork and whiskey are among Texas's hardest-hit exports. The EU has targeted $3.2 billion in American goods exported to the 28-member bloc, including bourbon and Harley Davidson motorcycles.

The EU retaliation came after Trump s administration on June 1 struck Europe as well as allies in Canada, Mexico and elsewhere with tariffs on aluminum and steel. This is higher than the 1 million barrels-a-day increase that OPEC countries have agreed on, sending oil futures on a decline.

Trump's views on tariffs have been a sore subject, even among fellow Republicans who have criticized Trump's imposition of steep tariffs against US allies. "But we believe that a potential 25 per cent tariff on imported vehicles and auto parts will, in fact, have the opposite affect".

European Union officials said no decision to retaliate has yet been made, but warned such countermeasures could impact "a significant volume of trade" amounting to $294 billion "across sectors of the USA economy".

The $380 million plant opened in January, days before President Donald Trump levied tariffs on imported washers and some parts.

Mr Trump is now mulling tariffs of up to 20% on all cars and vehicle parts made in the EU.

Several European auto makers already build their vehicles in the U.S., with the most recent example being the BMW X7, which will be exempt from tariff changes.

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