Trade

Trump Floats New Reason for Imposing Car Tariffs

JM Ashby
Written by JM Ashby

Trump and his regime threatened impose tariffs of 25 percent on cars and car parts imported from Europe last year in response to the European Union's failed appeal of the World Trade Organization's (WTO) ruling against subsidies for Airbus.

The Washington Post reported last week Trump has threatened to impose those same tariffs on European cars and parts if they don't sanction Iran for breaching the terms of the nuclear peace deal that Trump unilaterally withdrew from first.

Speaking at Davos, Trump now says he'll impose tariffs of 25 percent on European cars and car parts if they don't agree to a trade deal of some description.

“I met with the new head of the European Commission, who’s terrific. And I had a great talk. But I said, ‘look, if we don’t get something, I’m going to have to take action’ and the action will be very high tariffs on their cars and on other things that come into our country,” Trump told CNBC’s Joe Kernen in an interview from the World Economic Forum in Davos, Switzerland. [...]

Trump told CNBC that the European Union had to make a deal on trade. “They have no choice,” Trump said.

In a separate interview in Davos with Fox Business News, Trump said the tariffs on EU cars could amount to 25%.

This revolving list of reasons and possible justifications for imposing tariffs on European cars and parts suggests to me that the White House doesn't actually know if they have a legal mechanism for imposing tariffs.

Trump did go through the process of having the Commerce Department declare foreign cars a threat to national security so he could impose tariffs on them, but the window of legal opportunity to do that expired in November of 2019. If he were to impose tariffs now, the Commerce Department would have to restart the process or Trump would have cite some other statute.

I don't know where the European Union's head is at, but I think they should call Trump's bluff and tell him to shove his threats up his ass. Imposing tariffs on European cars and parts would harm the European economy, but it would also bring ruin to Trump's election-year economy here in the United States and decimate down-ballot Republicans in states that the GOP needs to hold on to if they even want to have a chance.

Moreover, because Trump's list of possible reasons for imposing tariffs on cars and parts keeps growing -- the EU could agree to one thing Trump wants and he could still impose tariffs for another reason.

If he really wants to do this, let him.

  • muselet

    As has pointed out many times before, the car industry is global. Just because a car is built in one country doesn’t mean the parent company is located there; likewise, a car is built from components and subassemblies sourced from just about everywhere else.

    Example: last June, I looked at the window sticker of a new Honda Civic Sport. The listed Major Sources of Foreign Parts Content were United Kingdom at 20% and Japan at 20%, the engine came from Japan, the transmission from the US, and final assembly was at Swindon, Wiltshire, England. Given all that, was that car Japanese or English or American (since it was built for and put on sale by American Honda Motor Co., Inc.)?

    Mercedes-Benz and BMW have assembly plants in the US, building cars for the US market and also the rest of the world. Are those cars German or American?

    How are tariffs to be applied to multinational cars (and they’re all multinational)?

    Donald Trump desperately wants to impose tariffs on anything and everything coming into the US, partly because of his inchoate (and incoherent) mercantilism, but mostly because he sees tariffs as a weapon he can use to bully other countries.

    I agree that the EU shouldn’t let its behavior be dictated by the US. If Trump wants to act like a small-time mob boss, let him. The rest of the world doesn’t have to play along.

    –alopecia

    • You just demonstrated that you know more about the subject than Trump does, by a long shot. He knows nothing but thinks he does; the worst kind of dangerous idiot.

      • muselet

        To be fair, the average housecat knows more about the car industry than Donald Trump.

        And yes, he’s a dangerous idiot.

        –alopecia