Trump's European auto tariff threat could crunch German automakers

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U.S. President Donald Trump on Friday threatened to impose a 20 percent tariff on all cars imported from the European Union, apparently in response to the bloc's imposition of extra duties on American products.

The latest threat came the same day that European Union placed tariffs on USA products ranging from orange juice to vodka, retaliation for Trump tariffs earlier this year on aluminum and steel.

The Wall Street Journal noted that the latest Trump tariff tweet underscored "the importance he is placing on a probe his administration launched last month into whether big tariffs could be imposed on vehicle imports in the name of national security".

President Donald Trump fired back immediately, repeating his threat to impose tariffs on European vehicle exports to the United States.

Shares of Volkswagen AG, Daimler AG and BMW AG fell in Frankfurt, and United States auto companies erased earlier gains in NY trading.

The president told the European carmakers to "Build them here!" - but many European carmakers build a large percentage of their vehicles in the U.S. already, according to the EU. Daimler, the maker of Mercedes-Benz cars and a frequent target of Trump's tweets, lost 1.4 percent to 57.04 euros.

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The dollar fell against the yen in early Asian trade on Tuesday after U.S. President Donald Trump's threats of more tariffs on China raised worries about an escalating trade war between the world's two largest economies.

"Further escalation of the trade conflict benefits no one", the statement said. The White House has invoked the same rationale in assessing tariffs earlier this month on steel and aluminum imports.

In Tokyo, Chief Cabinet Secretary Yoshihide Suga told a press conference the Japanese government "will tenaciously continue to urge (more) exemptions from additional tariffs".

Trump's latest utterance is also thought to be related to fresh trade tariffs imposed by the European Union on United States goods like motorcycles, jeans and whiskey, themselves a reaction to U.S. tariffs on European Union steel and aluminium. If the organization rules in its favor, or after three years if the case is still going on, the European Union plans to impose further tariffs of 3.6 billion euros on US products.

During his presidential campaign, Trump promised to apply tariffs, saying countries around the world had been exploiting the U.S.

BMW's largest plant in the world, in SC, built 371,000 cars previous year.

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The new European Union tariffs are meant to retaliate for Trump's steel and aluminum tariffs, which European Union leaders have declared illegal on numerous occasions and are contesting before the World Trade Organization.

Politico reported that the German auto industry has been open to reducing tariffs, but only if it ended up being part of a larger trade negotiation between the us and the EU. "We produce more than 800,000 vehicles in North America and employ 116,500 people in 250 factories".

"80% of Mexico's Exports come to the United States". In total, the United States exported $10 billion worth of passenger vehicles to the United States in 2017.

European automakers already make some cars in the United States. A group representing major U.S. and foreign vehicle makers has said it was "confident that vehicle imports do not pose a national security risk". "I see it helping the used auto market more".

German-built vehicles exported to the United States fell 10 percent to 494,000 vehicles, while German automakers produced 804,000 vehicles in the United States past year.

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