Trump Tariff Threat on EU Cars Escalates Global Trade War

President Donald Trump threatened a 20 percent tariff on cars imported from the European Union unless Brussels removes import duties and other barriers to U.S. goods, escalating a global trade war the EU warned could endanger $300 billion in commerce, Bloomberg informs.

“Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump said in a tweet on Friday.

The EU planned to retaliate, according to a European Commission memo obtained by Bloomberg. “An introduction of U.S. tariffs would be met with equivalent penalties imposed by affected trading partners,” the Commission said.

Shares of Volkswagen AG, Daimler AG and BMW AG fell in Frankfurt, and U.S. auto companies erased earlier gains in New York trading. Trump’s tweet came hours after the EU imposed tariffs on about $3.3 billion of American products in response to his barriers to imported aluminum and steel.

The European tariffs target politically resonant products, including 25 percent duties on Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon. The EU measures cover a total of around 200 categories, also including various types of corn, rice, orange juice, cigarettes, cigars, t-shirts, cosmetics, boats and steel.

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