The US-China trade war optimism is being undermined by fears that Donald Trump could impose new tariffs on Europe’s car industry.
The US Department of Commerce has just filed a report, outlining whether the EU auto industry is a national security threat.
Trump now has 90 days to read this “section 232” report, and decide whether to impose levies of up to 25% on imported vehicles, or components.
The report is thought to focus on emerging technologies, at a time when the car industry is scrambling to develop better electric technologies as consumers shun diesel.
America’s Motor and Equipment Manufacturers Association has already urge the White House not to open up a new trade dispute, saying:
“These tariffs, if applied, could move the development and implementation of new automotive technologies offshore, leaving America behind.
“Not a single company in the domestic auto industry requested this investigation.”
This is weighing on European car stocks, with Volkswagen and Daimler both down 1%.
That’s put the German DAX into the red. Britain’s FTSE 100 has also dipped in early trading, as Europe drops the bullish baton handed over by Asia overnight.Source
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