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Thread: Trump Tariff Threat on European Cars Escalates Global Trade War

  1. #1

    Trump Tariff Threat on European Cars Escalates Global Trade War

    https://www.bloomberg.com/news/artic...-european-cars

    June 22, 2018



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

    “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,” it 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.

    Read More: EU Warns of ‘Severe Disruption’ as Trump Threatens Car Tariffs

    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.

    Trade War
    Trump’s latest salvo against the European auto industry threatens to broaden a trade war that he’s already sparked with China. The U.S. has pledged to impose 25 percent tariffs on $34 billion in Chinese goods on July 6, and China vowed to retaliate in the same amount of U.S. imports.

    BI’s Analysis: Porsche, Audi Most Exposed to $26 Billion U.S. Sales Tariff Risk

    The U.S. may justify the auto tariffs on the grounds of national defense, just as it did in March when imposing duties on global imports of steel and aluminum. Trump initially exempted the EU from the metal tariffs, but let the temporary reprieve expire after negotiations with the Europeans fell apart.

    America’s Ambassador to Germany Ric Grenell is in Washington this week seeking a deal on auto levies.

    He spoke to White House trade adviser Peter Navarro, Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin about reducing existing tariffs on cars shipped between the U.S. and Europe to zero. There’s support in the administration and from German carmakers for such an idea, but no agreement has been reached yet.

    Rarely Used
    The Commerce Department in May started investigating whether imports of cars and light trucks hurt America’s ability to defend itself by eroding the country’s auto industry. If the findings show a threat to the U.S., a 1960s-era trade law gives the president authority to impose import restrictions without congressional approval.

    Many lawmakers have been critical of Trump’s use of the trade law, which was rarely applied before he took office. Ross during a Senate hearing on Wednesday faced heated questions from GOP lawmakers who argued there was no merit to claiming auto imports threaten the country’s defense capabilities.

    Bill Reinsch, senior adviser at the Center for Strategic and International Studies in Washington and former Commerce official, said the president’s tweet may undermine his government’s argument for auto tariffs.

    “Having ordered an investigation into whether auto imports are a national security threat, he has now undercut that by reaching his conclusion before the investigation has barely begun,” Reinsch said. “It’s a classic case of ‘ready, fire, aim,’ and it will only lead to litigation in the U.S. and a loss at the WTO when we are inevitably taken there.”



    The Washington trade association for BMW, Daimler and Volkswagen’s operations in the U.S. warned consumers will be harmed by higher tariffs. “Consumers fare best when tariffs are low,” Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, said in a statement. The group also represents General Motors Co. And Fiat Chrysler Automobiles NV.

    Trump’s tariff rhetoric further undermines a U.S. auto market already in its second year of decline after record sales in 2016, said Cody Lusk, president of the American International Automobile Dealers Association. He pointed to Daimler’s decision on Thursday to pare its profit outlook as an early example.

    “You’re already going to see prices going up incrementally as a result of the steel and aluminum tariffs in the auto sector,” said Lusk, whose group represents foreign-branded auto dealers in the U.S. “All of that combined with increasing interest rates is a recipe for disaster.”



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  3. #2
    You know, throughout all this, I have to ask why it is that when the USA enacts tariffs, the ENTIRE WORLD is like, "OMG!!! You idiots! You know nothing about economics. American arrogance!!! WAAAAAAH!!! We're gonna raise our tariffs from 300% to 400% in response! Take that!"

    Nevermind that they've been doing the same thing for over half a century.

    I mean, why does the WTO even exist? So when we enact tariffs we "get taken for litigation" but when other countries do it, that's just A-OK? Another useless globalist entity we need to withdraw from.
    Last edited by nobody's_hero; 06-23-2018 at 08:46 AM.

  4. #3
    Quote Originally Posted by nobody's_hero View Post
    You know, throughout all this, I have to ask why it is that when the USA enacts tariffs, the ENTIRE WORLD is like, "OMG!!! You idiots! You know nothing about economics. American arrogance!!! WAAAAAAH!!! We're gonna raise our tariffs from 300% to 400% in response! Take that!"

    Nevermind that they've been doing the same thing for over half a century.

    I mean, why does the WTO even exist? So when we enact tariffs we "get taken for litigation" but when other countries do it, that's just A-OK? Another useless globalist entity we need to withdraw from.
    Were you expecting a different reaction?

  5. #4
    Quote Originally Posted by nobody's_hero View Post
    You know, throughout all this, I have to ask why it is that when the USA enacts tariffs, the ENTIRE WORLD is like, "OMG!!! You idiots! You know nothing about economics. American arrogance!!! WAAAAAAH!!! We're gonna raise our tariffs from 300% to 400% in response! Take that!"

    Nevermind that they've been doing the same thing for over half a century.

    I mean, why does the WTO even exist? So when we enact tariffs we "get taken for litigation" but when other countries do it, that's just A-OK? Another useless globalist entity we need to withdraw from.
    The US has had tariffs for ages too- we aren't tariff free. All countries protect certain industries. The US currently averages 1.6% tariff on all imported goods (not all goods are subject to tariffs). Canada averages 0.8%, France 1.6%. Germany 1.6%, Russia 3.4%, Great Britain 1.6%, Italy 1.6%.

    https://data.worldbank.org/indicator....MRCH.WM.AR.ZS


    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    "Truth isn't truth"- Rudy Giuliani

    "China has total respect for Donald Trump and for Donald Trump's very, very large brain," - Donald Trump.

    "Yeah, I have to say these guys(trolls) are pretty sharp. Sort of good to get a challenge and sharpen your thoughts." NorthCarolinaLiberty

    I am Zippy and I approve of this post. But you don't have to.

  6. #5
    Quote Originally Posted by Zippyjuan View Post
    The US has had tariffs for ages too- we aren't tariff free. All countries protect certain industries. The US currently averages 1.6% tariff on all imported goods (not all goods are subject to tariffs). Canada averages 0.8%, France 1.6%. Germany 1.6%, Russia 3.4%, Great Britain 1.6%, Italy 1.6%.

    https://data.worldbank.org/indicator....MRCH.WM.AR.ZS
    Again zippy uses averages to hide the details and completely ignores non-tariff barriers.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  7. #6
    Quote Originally Posted by Swordsmyth View Post
    Again zippy uses averages to hide the details and completely ignores non-tariff barriers.
    The US- like all other countries- has plenty of those too.


    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    "Truth isn't truth"- Rudy Giuliani

    "China has total respect for Donald Trump and for Donald Trump's very, very large brain," - Donald Trump.

    "Yeah, I have to say these guys(trolls) are pretty sharp. Sort of good to get a challenge and sharpen your thoughts." NorthCarolinaLiberty

    I am Zippy and I approve of this post. But you don't have to.

  8. #7
    Quote Originally Posted by Zippyjuan View Post
    The US- like all other countries- has plenty of those too.
    Every other country on earth is more protectionist than us and they target our important industries.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  9. #8
    Quote Originally Posted by Swordsmyth View Post
    Every other country on earth is more protectionist than us and they target our important industries.
    We haven't yet talked about how much the Federal Reserve sends to their banks.



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  11. #9
    Quote Originally Posted by timosman View Post
    We haven't yet talked about how much the Federal Reserve sends to their banks.
    Or Foreign Aid or The US paying for their defense and many other ways they leech off of us.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  12. #10
    Quote Originally Posted by timosman View Post
    We haven't yet talked about how much the Federal Reserve sends to their banks.
    How much do they send to foreign banks?

    https://www.federalreserve.gov/monet...idityswaps.htm

    Dollar Liquidity Swap Lines

    In response to mounting pressures in bank funding markets, the FOMC announced in December 2007 that it had authorized dollar liquidity swap lines with the European Central Bank and the Swiss National Bank to provide liquidity in U.S. dollars to overseas markets, and subsequently authorized dollar liquidity swap lines with each of the following central banks: the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Canada, Danmarks Nationalbank, the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Korea, the Banco de Mexico, the Reserve Bank of New Zealand, Norges Bank, the Monetary Authority of Singapore, Sveriges Riksbank, and the Swiss National Bank. Those arrangements terminated on February 1, 2010.
    Foreign-Currency Liquidity Swap Lines

    In April 2009, the Federal Reserve announced foreign-currency liquidity swap lines with the Bank of England, the European Central Bank, the Bank of Japan, and the Swiss National Bank. The foreign-currency swap lines could have supported operations by the Federal Reserve to address financial strains by providing liquidity to U.S. institutions in sterling in amounts of up to £30 billion, in euro in amounts of up to 80 billion, in yen in amounts of up to ¥10 trillion, and in Swiss francs in amounts of up to CHF 40 billion. These arrangements terminated on February 1, 2010.
    North American Framework Agreement Swap Lines

    In 1994, the Federal Reserve established bilateral currency swap lines of $2 billion with the Bank of Canada and $3 billion with the Bank of Mexico for the purpose of promoting orderly currency exchange markets. These lines were established under the North American Framework Agreement (NAFA). Mexico also has a $3 billion NAFA swap line with the U.S. Treasury. The Federal Open Market Committee is asked annually to renew the Federal Reserve's NAFA swap agreements; draws on the lines also are subject to its approval. Canada has never drawn on its line; Mexico last used its line in 1995.
    Since their initial establishment in 2009, except for pre-arranged small-value test operations the Federal Reserve has not drawn on any of the foreign-currency liquidity swap lines.
    Last edited by Zippyjuan; 06-23-2018 at 09:58 PM.


    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    "Truth isn't truth"- Rudy Giuliani

    "China has total respect for Donald Trump and for Donald Trump's very, very large brain," - Donald Trump.

    "Yeah, I have to say these guys(trolls) are pretty sharp. Sort of good to get a challenge and sharpen your thoughts." NorthCarolinaLiberty

    I am Zippy and I approve of this post. But you don't have to.

  13. #11
    Europe and Aisa already form the most significant Axis in Global Trade. Trump's trade wars seek to make that axis bigger and stronger.

    "Let it not be said that we did nothing." - Dr. Ron Paul. "Stand up for what you believe in, even if you are standing alone." - Sophie Magdalena Scholl
    "War is the health of the State." - Randolph Bourne "Freedom is the answer. ... Now, what's the question?" - Ernie Hancock.

  14. #12
    Quote Originally Posted by AZJoe View Post
    Europe and Aisa already form the most significant Axis in Global Trade. Trump's trade wars seek to make that axis bigger and stronger.

    Both Europe and China are in worse shape than we are and both are about to collapse.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  15. #13
    Quote Originally Posted by Swordsmyth View Post
    Both Europe and China are in worse shape than we are and both are about to collapse.
    That is an idealistic fantasy, but just a self-delusional wishful fantasy. Europe may collapse first, but US economy is in far worse shape and the collapse will be far deeper and far worse.
    "Let it not be said that we did nothing." - Dr. Ron Paul. "Stand up for what you believe in, even if you are standing alone." - Sophie Magdalena Scholl
    "War is the health of the State." - Randolph Bourne "Freedom is the answer. ... Now, what's the question?" - Ernie Hancock.

  16. #14
    Shares of Volkswagen AG, Daimler AG and BMW AG fell in Frankfurt, and U.S. auto companies erased earlier gains in New York trading.
    It's amazing how little research many stock traders do...







    If you're dying to dump some stock, dump Jaguar/Land Rover, Saab and Audi.
    Last edited by acptulsa; 04-14-2019 at 12:39 PM.
    Quote Originally Posted by angelatc View Post
    There's not a liberty lover on the planet who isn't called a liberal by the right, and a con by the left.
    Quote Originally Posted by Swordsmyth View Post
    I don't really care if I happen to be wrong about your positions, you are wrong about mine.

  17. #15
    Quote Originally Posted by AZJoe View Post
    That is an idealistic fantasy, but just a self-delusional wishful fantasy. Europe may collapse first, but US economy is in far worse shape and the collapse will be far deeper and far worse.
    LOL
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



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