The President of the United States continues his commercial offensive. Donald Trump threatened the European Union (EU) on Thursday and Canada with additional customs duties. If they coordinate “to harm economically in the United States, large-scale customs duties, much more important than those currently planned, will be imposed on both of them, in order to protect the best friend that each of these two countries has ever had! “, He posted on the Truthocial network.
These threats occur in the commercial war launched by Washington, against Canada and the EU in particular. The United States has already increased steel and aluminum taxes, of which Canada is an important supplier. On the European side, many sectors are in the American viewfinder. In this logic, Donald Trump announced additional customs duties on imported cars on Wednesday.
He announced 25 % additional customs duties on “all cars that are not made in the United States” and which will come into force “April 2 and we will start to collect them on 3”. The total tax rate will be 27.5 % of the value. “We are going to charge the countries that do business in our country and take our wealth,” said Donald Trump.
As a result of this announcement: the automotive sector fell sharply at the opening of European scholarships on Thursday morning. Around 8:15 am (GMT), the Paris Stock Exchange lost 1.08 %, Frankfurt 1.46 %, London 0.65 %and Milan 1.24 %. Around 10:30 am in Paris, the CAC 40 yielded 0.51 %, a drop of 40.73 points bringing it to 7,989.95 points. The New York Stock Exchange also opened. In the first exchanges, the Dow Jones fell 0.23 %, the NASDAQ index by 0.49 %and the enlarged S&P 500 index of 0.38 %.
“A fatal signal for free trade”
The strengthening of customs duties on imported cars is a disaster for many European manufacturers, including the Germans, who carry out a large part of their profits there. They “represent a considerable charge for companies and global supply chains” in the automotive industry, “with negative consequences, especially for consumers, including in North America,” said the federation of German car manufacturers, which represent almost two thirds of European exports. She sees it as a “fatal signal for free trade”.
The British automotive industry calls on both sides of the Atlantic to find “an agreement” to avoid customs duties, after the “disappointing” announcement of the additional 25 % in the sector. “Rather than imposing customs duties in addition, we should explore the means to create opportunities for British and American manufacturers,” said Mike Hawes, managing director of the SMMT sectoral association.
On the scale of Europe, Sigrid de Vries, director general of the Association of European Automobile Manufacturers (ACEA), asked “urging President Trump to take into account the negative impact of customs duties not only on world car manufacturers, but also on American national industry”.
There will be “only losers” in “the trade war that opens” with the United States, the automotive platform (PFA) told AFP on Thursday, which brings together the major manufacturers and equipment manufacturers present in France. “For Europe, this conflict comes at worst moments, against a background of historical transformation, market crisis and competition intensification,” said the PFA.
American manufacturers are also concerned about the situation. It is “crucial” that customs duties do not “set up prices for consumers”, warned this Thursday Ford, GM and Stellantis in a press release from the Professional Association of American Manufacturers (AAPC). The American automaker General Motors fell almost 8 % at the opening of the New York Stock Exchange. Ford released 1.71 %, while Stellantis fell 3.60 %.
The three major manufacturers will “continue to work” with the government on “sustainable policies that help the Americans”, but ask that the “competitiveness” of “North American” car production be preserved, therefore integrating Canada and Mexico.
Washington partners are protested
“Aggressiveness increases, it is very bad news and it is an act which is obviously non-cooperative,” reacted Thursday the French Minister of the Economy Eric Lombard on France Inter. “We are in a situation where being in a position where aggressive measures are taken, it is the European Union which negotiates. And the only solution for the European Union will in turn be to increase customs prices towards American products, and the list is being established by the Commission, “he said.
“Extremely regrettable,” reacts Japan for whom “all the options are on the table” now. “We cannot stay without doing anything,” said Brazilian president Lula, while Canadian Prime Minister Mark Carney denounced “a direct attack”. “There is no winner in a trade war or a war of customs rights,” repeated, in a more measured tone, the Chinese government.
“I think he makes a big mistake,” said the leader of the center right (PPE) in the European Parliament, the German Manfred Weber, during a press point. “He builds commercial walls and everyone will suffer, Europeans and Americans. There will be no winner, “he regretted, saying” to hope to convince our American friends that it is not a way of doing things “.
Present at the same press point, the French president of the Senate Gérard Larcher pleaded for a “proportionate” response. It must “address a number of sensitive sectors and not simply in Kentucky Bourbon,” he added. The EU announced in mid-March customs duties on several American products, including Bourbon, motorcycles or boats, in retaliation for American surcharges of 25 % in force on the same day on steel and aluminum.