Officials from the European Union (EU) have vaguely stated that they will impose retaliatory tariffs on American agriculture if Trump imposes tariffs on foreign cars and parts, but the EU is also preparing to target American manufacturing.
Speaking to Bloomberg off the record, EU officials say they've begun drafting a list of targets that includes businesses that have already been harmed by Trump's greater trade war.
Caterpillar Inc. trucks, Xerox Corp. machines and Samsonite International SA luggage are among U.S. goods that would face retaliatory European Union tariffs should President Donald Trump follow through on a threat to impose automotive duties against the bloc, according to a senior EU official. [...]
If the U.S. raises tariffs on vehicles and auto parts, it will make the levies imposed on steel and aluminium last year “look like a picnic,” Mike Jackson, the CEO of car-dealership group AutoNation, said in an interview.
“It’s almost so unthinkably, draconianly disruptive to everything he’s trying to do with the economy that, at the end of the day, I don’t believe it will happen,” Jackson said, referring to Trump, adding that higher car duties would be “the nuclear tariff option.”
Caterpillar saw its worst earnings in a decade in 2018 because the company has already been a casualty of Trump's tariffs on foreign steel and aluminum and even his tariffs on Chinese goods.
Trump's tariffs on steel and aluminum increased the cost of building Caterpillar vehicles and equipment and China's retaliatory tariffs on American agriculture has pushed farms into bankruptcy; farms that buy Caterpillar equipment. Tariffs on build materials has also increased the cost of construction and reduced demand for Caterpillar equipment.
Like most other manufacturers, Caterpillar or Xerox and other companies need access to foreign markets to drive sales and retaliatory tariffs will dramatically reduce access to the second largest economy the world; the European Union.
None of this is happening in a vacuum. It's all connected and Trump doesn't have a single clue how any of it works.