European Union to impose duties on U.S. imports on Friday after Trump tariffs

European Union to impose duties on U.S. imports on Friday after Trump tariffs

European Union trade commissioner Cecilia Malmstrom adresses a news conference on the US tariffs on steel and aluminium in Brussels on June 1. That comes after the USA put a 25 percent tariff on $34 billion of Chinese goods, to which Beijing responded by imposing an identical charge on the same amount of American goods.

The move confirms a tit-for-tat dispute that could escalate into a full trade war, particularly if US President Donald Trump carries out his threat to penalise European cars.

The European Union (EU) on Friday levied tariffs on estimated $3.2 billion worth of American goods, in retaliation for tariffs US President Donald Trump's tariff imposition on imported steel and aluminium.

The U.S. Commerce Department is investigating whether imports of automobiles and auto parts pose a risk to national security.

Even before Mr Trump's latest threat, some USA companies in China were feeling the pressure.

"We did not want to be in this position", EU Trade Commissioner Cecilia Malmstrom said in a statement, adding that the "unilateral and unjustified" U.S. decision had left the EU with no choice.

The German auto industry supports talks to reduce auto tariffs between the US and European Union, but only as part of a larger trade negotiation. The EU imposes a 10 per cent tariff on imported US cars. "The EU perhaps will find a few disgruntled consumers who have to pay more for their Harley Davidsons, but that is not a big loss for us". European Union steel and aluminium exports now facing USA tariffs are worth a total of 6.4 billion euros (RM29.6 billion).

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For Americans, new auto tariffs would likely mean higher car prices for both imported and domestically manufactured vehicles.

The new duties have been imposed as tensions over trade continued to grow between the USA and China.

The EU said that if the situation isn't resolved, or if the US responds with more tariffs, the EU said that it will add additional tariffs on 160 USA products worth $4.3 billion.

The Chinese have said they will respond in kind.

The rising tensions and the chaos surrounding the steel and aluminum tariffs are starting to generate pushback on Capitol Hill. All told, the $450 billion in potential tariffs would cover almost 90 percent of goods China sends to the United States. Senators this week grilled Commerce Secretary Wilbur Ross.

"Anything that comes on Twitter is just really noise, I don't think you can use that as an official medium to make global policies", said Alastair Sandler, an equity sales trader at Northern Trust.

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