Donald Trump threatens to impose 20 per cent tariff on European car imports
Stocks of Volkswagen, Daimler and BMW all fell in Frankfurt
German automotive stocks fell after US President Donald Trump threatened to impose a 20 per cent tariff on all European car imports into the US.
“Based on the Tariffs and Trade Barriers long placed on the U.S. and its great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump said in a tweet on Friday.
Based on the Tariffs and Trade Barriers long placed on the U.S. & its great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!
— Donald J. Trump (@realDonaldTrump) June 23, 2018
The risk is becoming more real, said Jeff Schuster, senior vice-president of forecasting at LMC Automotive, before Trump’s latest salvo.
“A few weeks ago, we thought these issues on trade would fade away,” Schuster said. “What we’re now looking at is extremely disruptive to carmakers for their production setups and profit margins.”
Shares of Volkswagen AG, Daimler AG and BMW all fell in Frankfurt.
Daimler, the maker of Mercedes-Benz cars and a frequent target of Trump’s tweets, lost 1.4 per cent. Fellow luxury-car maker BMW declined 2.2 per cent. Volkswagen, less reliant on imports into the US, declined 1 per cent.
A 25 per cent tariff, previously floated by Trump, would add around €10,000 (US$11,600) to the sticker price of a European built car, the European Commission said in a report that was prepared ahead of next week’s summit assessing tariff threats.
Duties at this level could be expected roughly to reduce US imports of car and car parts in half.
Shares of General Motors and other US automakers gave back earlier gains. General Motors had been up as much as 1.5 per cent, Ford Motor Co was up 1.4 per cent and Fiat Chrysler Automobiles NV’s New York had been up 2.5 per cent.