American president Donald Trump has threatened to tax imported cars from the European Union as part of his increasingly vehement rhetoric around trade tariffs.
America is the largest export market for cars built in the EU. Statistics show that £171 billion worth of cars were exported from the EU last year, with the US the destination for 25% of them. Of those cars, just more than half were exported by German car makers.
Trump’s comments come as part of a wider focus on imported goods, including proposed tariffs on imported steel and aluminium. The move is part of his ‘America First’ campaign, in which he has pledged to protect American interests and jobs. He has described existing trade deals that don’t favour America as “very stupid”.
The specific threat to the car industry was made in a Tweet, which read: "If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US.
"They make it impossible for our cars (and more) to sell there. Big trade imbalance!" [sic]
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. They make it impossible for our cars (and more) to sell there. Big trade imbalance!
— Donald J. Trump (@realDonaldTrump) March 3, 2018
In a second Tweet he added: "Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!"
As well as widespread condemnation from car makers – who have pointed out that they manufacturer their most successful models in the US already, employing hundreds of thousands of Americans directly and indirectly – Trump’s comments have brought a mixed reaction from his political allies and opponents.
In addition, Canadian prime minister Justin Trudeau described tariffs as "absolutely unacceptable" and hinted that any tariff would be met with strong resistance and potentially retaliatory action. Brazil, Mexico and Japan have hinted at similar moves.