EU warns U.S. of boomerang effect if Trump imposes car levies

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In a letter sent to U.S. Commerce Department Friday, the European Union said tariffs on European cars and auto parts were unjustifiable.

The EU sent comments to the US for consideration in the Department of Commerce investigation into whether auto imports pose enough of a threat to USA national security to justify tariffs and estimating the economic impact. The EU, which described the move as "pure protectionism", introduced duties on USA products in return, as did Mexico, Canada, Turkey and India.

Canada is the United States' second-biggest trading partner in goods, just behind China.

On Sunday, Trump said the European Union was "as bad" as China when it came to the way European countries traded with the US.

"To be honest with you, Prime Minister Trudeau, I respect". But mounting trade tensions have opened a rift with the president.

"In general, it was an attack on the president", Kudlow claimed. Trump says the WTO has allowed the United States to be taken advantage of in global trade. The tariff which will apply to parts imported from China - circuit boards and "associated components" eg pretty much all of the electrical components many manufacturers in the USA use to source their parts will come into force on July 6th, as part of a wider set of tariffs including those from the EU.

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"No, no, no, no", he said, noting that more tariffs could be imposed if there is no deal with China. But Italy blocked their formal adoption until the migration issue was fully addressed.

The EU has warned Washington that a threat to slap Europe with major auto tariffs could inflict serious damage to the U.S. economy and would prompt strong retaliation.

Another official described the dispute between Trump and Western allies at the Group of Seven summit last month as a gift to Beijing because it showed European leaders losing a long-time ally, at least in trade policy. Retaliatory tariffs would cost billions and kill thousands of jobs. Trump slammed the company's move, saying it was tantamount to surrender, and threatened punitive taxes.

The submission said European vehicle companies are "well established" in the United States. Chamber of Commerce tracked the expected effects in each state of U.S.

The Chamber highlighted vulnerable exports from states that had supported Trump in his surprise 2016 presidential election victory: US$2.3 billion in MI steel and aluminum goods as well as autos, US$1.7 billion in Pennsylvania steel, iron, coffee and baked goods and US$1 billion in Wisconsin cheese, toilet paper and ginseng all face retaliation from USA trading partners.

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