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.