Trump likely to impose new US auto tariffs

Senate finance committee chairman, Charles Grassley, said US president Donald Trump would be likely to move ahead with tariffs on imported vehicles.

Trump to impose US auto tariffs Source: Bloomberg

Trump has previously threatened to impose new auto tariffs, saying: ‘Cars is the big one,’ earlier last year.

Mr. Grassley told reporters on Wednesday that he thinks the president is ‘inclined’ to do it. ‘I think Europe (is) very, very concerned about those tariffs ... It may be the instrument that gets Europe to negotiate.’ Mr Grassley said.

Mr. Grassley wants the EU to negotiate agricultural issues in trade talks, but the EU has said they would not negotiate on agriculture.

Last week, the US trade representative’s office published its objectives for EU talks, including seeking full agriculture access.

The new tarrifs could prompt the EU to agree on a new trade deal, after Trump urged the EU to drop its 10% tariff on imported vehicles.

Brand producer lobbys against 25% auto tarrifs

The auto tariffs could be up to 25%, which brand producers have lobbied against. They argue there is no evidence auto imports pose a national security risk.

German automakers met with Trump in December urging him not to impose tariffs, joining many automakers who believe 25% tariffs would raise cumulative prices for US vehicles by $83 billion annually, and cost hundreds of thousands of jobs.

The US passenger car tariff is 2.5%, while it imposes 25% on trucks.

Recommendations into whether Trump should impose tariffs on imported cars and parts are due by mid-February by the US Commerce Department.

The White House has vowed not to move forward with imposing tariffs on the EU or Japan while they are still making constructive progress in bilateral trade talks.

Senators Doug Jones and Lamar Alexander re-introduced legislation to delay any 25 % tariff earlier this week, requiring the international trade commission to conduct a detailed study before tariffs could be applied.

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