The US Department of Commerce will release a report on imports of vehicles and parts today that has called for the imposition of tariffs on national security grounds. The tariffs are expected to primarily focus on European imports and are not supported by US automakers.
The Trump administration would have 90 days to respond to the recommendations and is expected to impose duties of up to 25% after calling European auto exports a national security threat to US domestic industry. Imposing import tariffs on European cars would reopen another front of trade tensions for Washington as it prepares for another round of talks with Beijing ahead of a March deadline.
The duties are expected to be used by Washington in an attempt to force Brussels to reduce its 10% duty on imports of American vehicles. This comes despite the EU having already drawn up retaliatory duties on $23 billion worth of US exports. German automakers at a December White House meeting had expected that their pledges to increase investment and manufacturing capacity would have removed the threat of tariffs. However, Trump is expected to act on the report’s recommendations, raising the likelihood of a return of transatlantic trade tensions in the medium-term.
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Kai looks at security and political turbulence in the emerging market economies and also serves as a publisher with The Daily Brief.