Trade

EU Prepares Package of Retaliatory Tariffs

JM Ashby
Written by JM Ashby

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.

  • waspuppet

    “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.”

    It doesn’t matter what it will do to the economy. It doesn’t matter what it will do to the country. It doesn’t matter what it will do to anything or anyone else. If Trump decides at some point that it will make him feel better for the next 20 minutes, he’ll do it. That’s it. That’s the only consideration.

  • muselet

    Gollies. It’s almost as if Donald Trump knows less than nothing about macroeconomics and international trade.

    I just wonder if Vladimir Putin realizes that if the US and EU economies collapse, Russia’s won’t be far behind.

    –alopecia

  • Draxiar

    I have a hard time distinguishing what might be trumps stupidity, what might be Putin’s bidding, or if they’re one ad the same.

  • katanahamon

    This isn’t a random byproduct of their “strategery,” It’s a feature. First, they cut taxes on the rich. Then all these tariffs ruin economies around the world..why, then suddenly the debt and deficit will be declared important again, and what will the right wing point to as the cause? Social security, Medicare, Medicaid, any social spending whatsoever. They’ve lined their pockets first, now they will implement the longer term strategy. Next Dem prez we should enact all the programs we want first, then clean up the repub messes. Sick of them getting whatever they want at our expense..

    • simpfan

      Plus, when the economy does crash it’ll be easy to swoop in and buy cheap assets. Rinse and repeat.