Trump Postpones his Decision on the Car Tariffs on EU And Japan

The US President extends his ultimatum by up to six months, so as not to jeopardize the ongoing negotiations with Japan and the EU.

US President Donald Trump postpones his decision on the impending punitive tariffs on European import cars and components, several news agencies cite government officials.

Currently, the US only raises 2.5% duty on cars from the EU. This coming Saturday, Trump wanted to give the green light to increase these tariffs to up to 25 percent. That would have hit hard especially the German car industry. According to a recent study by consultants from BCG, imports of European cars into the US in 2018 have risen to $ 34 billion. This is almost twice as much as in 2013 ($ 18 billion). Almost half of them came from Germany. The Americans meanwhile only exported $ 3 billion worth of cars to the EU. Automakers on both sides of the Atlantic, such as General Motors and Volkswagen, have warned against negative consequences of tariffs.

 

Now Trump wants to postpone his decision by up to six months, they say. The reason for this may be concerns, otherwise it would endanger ongoing negotiations with the European Union and Japan – and open up too many fronts alongside the trade dispute with China.

The US Department of Commerce submitted a report on whether imports of automobiles and parts were threatened by national security under Article 232 of the Trade Expansion Act and President Trump would decide the final response policy by day 90.

 

It means that auto tariffs can be used as negotiation cards to attract advantageous bilateral trade negotiations with Japan and the EU.

The US Department of Commerce submitted a report on automobile duties in accordance with Article 232 of the Trade Enhancement Act in February. It was planned to decide whether President Trump would impose additional tariffs by Saturday this 18th. Japan, the EU, as well as Canada, Mexico, etc., as a car exporter, were particularly cautious, but the decision was postponed.

On the 15th, the New York Stocks Market was selling ahead, with the Dow and other major stock indices down and trading started. However, receiving news coverage, it was repurchased mainly for automobile-related stocks and turned to a rise.

The auto industry is concerned during the ongoing trade talks with the EU and Japan, some of the supposedly Republicans are against it. Although it has not been officially announced, there are several backgrounds to the postponement of the judgment of automobile duty. Both of them may have influenced, but it may be considered that the real reason is not the stock price.

In retaliation for the Trump administration raising tariffs on China, the Chinese government announced that it would raise the tariff rate on a wide range of products and agricultural products imported from the United States up to 25%. The New York Stock Market on the 13th was completely down as the trade war intensified. The Dow has fallen by over 700 points at one point and dropped 617 points at the closing price.

President Trump changed his stance on the 14th. Optimistic tweets, such as “compiling an agreement if it is matured” and “allowing to agree in three or four weeks,” and the like, made a series of remarks, and the stock market on the 14th rebounded with expectations.

It is also expected that the Korean automobile industry will be sigh for up to six months.

The Republican, however, reserves the right to overturn the decision in the short term, unreported. According to Trump and his confidants Wilbur Ross and Peter Navarro continue to be adherents of import duties – against the advice of their advisors. Rumors of a possible postponement of the decision have been around for some time. The official announcement is expected by the end of the week.

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Trump Postpones his Decision on the Car Tariffs on EU And Japan - /10

Summary

The US President extends his ultimatum by up to six months, so as not to jeopardize the ongoing negotiations with Japan and the EU.

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1 Comment

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