When President Donald Trump struck a trade deal with the European Union in July, officials on both sides stressed how it would ensure long-term stability to trans-Atlantic trade.
The Trump administration called the deal a "generational modernization of the transatlantic alliance." European Commission President Ursula von der Leyen said it "restores stability and predictability" by locking in 15 percent tariffs on most European goods exported to the U.S., while most American imports to Europe would be exempt from tariffs.
In other words, Trump got what he wanted out of that deal: A reduction in tariffs on American exports and the establishment of a new, permanent baseline tariff on European goods. European leaders also felt like they'd won something: the 15 percent tariff was lower than the 25 percent tariff Trump had threatened, and the deal would stop Trump from hiking tariffs the next time he was in a bad mood.
So much for that.
On Friday, Trump announced that he would raise tariffs on European-made cars to 25 percent. (Those tariffs are authorized by Section 232 of the Trade Expansion Act of 1962, so they are not affected by the Supreme Court's ruling in February that limited some of the president's power to impose tariffs unilaterally.)
Those higher tariffs could cost automakers $4 billion this year.
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