Trump responds to EU attacks with tax threat on European cars

Trump responds to EU attacks with tax threat on European cars
https://www.conservativeinstitute.org/economics/trump-responds-to-eu.htm?March 4, 2018
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President Donald Trump is on a mission to make America great again — and nothing, especially not the European Union (EU), is going to get in his way.

After the president announced new tariffs on steel and aluminum imports — at 25 and 10 percent, respectively — last week, members of the EU and other countries around the world promised to follow suit with their own taxes on American imports. Trump has now responded to their promises with a threat of his own: he won’t hesitate to hike up tariffs on European cars if they keep it up.

The Tariff
The abuse of America in the international trade game has been a pet peeve of the president for decades.

“We’re a debtor nation. Something is going to happen over the next number of years with this country because you can’t keep on losing $200 billion [the deficit at the time],” Trump said on The Oprah Winfrey Show in 1988. “And yet we let Japan come in and dump everything into our markets. It’s not free trade. If you ever go to Japan right now and try to sell something, forget about it. Just forget about it. It’s almost impossible. They don’t have laws against it, they just make it impossible.”

The now president continued:

They come over here, they sell their cars, their VCRs, they knock the hell out of our companies. And, hey, I have tremendous respect for the Japanese people. I mean, you can respect somebody that’s beating the hell out of you, but they are beating the hell out of this country.

Kuwait, they live like kings — the poorest person in Kuwait, they live like kings — and yet, they’re not paying. We make it possible for them to sell their oil. Why aren’t they paying us 25 percent of what they’re making? It’s a joke.

Trump later explained to the American people on Twitter how he wants to start changing these practices by imposing a tariff on steel and aluminum imports. He tweeted on Friday:

 
Donald J. Trump

@realDonaldTrump
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!

10:50 AM - Mar 2, 2018
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President Trump has had it with Americans being taken advantage of by other nations, and he is standing firm in his commitment to fight for the American worker. But it is a stand the rest of the world is not used to, and that the European Union, in particular, was not happy about.

The Threat
European Commission President Jean-Claude Juncker fired back against the president’s tariff with a threat of his own.

“We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” Juncker said in a statement. “Instead of providing a solution, this move can only aggravate matters.”

But Juncker was not the only foreign official to talk tough.

“The EU must respond decisively to U.S. punitive tariffs, which endanger thousands of jobs in Europe,” German Foreign Minister Sigmar Gabriel said. “There should be no doubt about that in Washington.”

Canadian Foreign Minister Chrystia Freeland added, “Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers.”

The Response
Despite these warnings from international officials, President Trump is not backing off.

“If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a tax on their cars which freely pour into the U.S.,” he wrote on Twitter on Saturday. “They make it impossible for our cars (and more) to sell there. Big trade imbalance!”

Other nations can talk tough all they want, but with the U.S. hosting the largest economy in the world, it is unlikely that the EU — or any other country — would exacerbate the situation to try and prove a point, particularly when the trade deficit for certain items actually works in their favor.

Engaging in a genuine trade war with the United States would prove detrimental to the world’s economy — and other countries surely don’t want to be to blame for that.