In a tweet posted on Friday, US President Donald Trump has threatened to impose a 20% tariff on all EU-made light vehicles entering the United States.
The tweet read: ‘If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all their cars coming into the U.S. Build them here!’
Figures from Automotive News show that about 7.2% of vehicles sold in the US through May were made in Europe. Germany in particular has been singled out.
The tweet comes several weeks after the US administration launched an investigation into whether imports of cars and auto parts pose a threat to national security. This is expected to be wrapped up by the end of July or early August, after which there will be two days of public comments on the findings.
But at the moment it remains just that: a threat. Trump would first have to negotiate World Trade Organization rules and this may not be possible.
This potential new tariff only adds to the list of trade conflicts Trump has already started, but many European bodies are still calling for a measured response and communication between both sides. The Germany car-lobby group VDA, for example, said that any escalation of trade conflicts is ‘of no use to anyone’ as it ‘would call into question the global production model at a time when efforts should be devoted’ to developing autonomous and electric vehicles.