- President Trump hit out at Europe, which has threatened retaliation for new U.S. steel export tariffs.
- Trump said the U.S. may levy a 25 percent tax on cars exported from the European Union, which could impact popular brands sold stateside.
President Donald Trump threatened to hit car exports from the European Union with a retaliatory tax, escalating a brewing global fight with U.S. trading partners triggered by newly announced 25 percent U.S. tariffs on imported steel and aluminum.
In a post on Twitter, Trump cited a "big imbalance" between the two countries, said if the 28-nation bloc insisted on imposing punitive taxes on U.S. goods, America would strike back on European car exports. It was an apparent response to European officials threatening policy changes of their own in the wake of Trump's sudden pronouncement on metal imports.
"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.," the president said on Twitter.
That could spell trouble for car manufacturers like Volkswagen and BMW, two of the most popular European brands sold in the U.S. The German luxury car maker also manufactures many of its cars in America, shipping billions of dollars worth abroad.
In 2016, the EU shipped more than 6 million cars abroad, and the U.S. — its largest market by far — absorbed more than 1 million of those, according to the European Automobile Manufacturers Association.
Each year, the U.S. imports more from Europe than the continent absorbs in American goods, to the tune of a trade deficit totaling more than $151 billion in 2017, according to U.S. Census data.
Trump's hasty decision to impose tariffs on steel imports has stoked talk of a brewing trade war, roiling both the political establishment and the global economic order. The move also prompted E.U. trade chiefs to weigh hitting a broad array of U.S. imports with a 25 percent tax, Reuters reported this week.
The president's full-throated backing of tariffs is in keeping with a campaign pledge to protect American workers from the vagaries of global trade. On Saturday, Trump renewed his criticism of U.S. trade policy, insisting that world leaders have "taken advantage of" the world's largest economy for years.
"The United States has an $800 Billion Dollar Yearly Trade Deficit because of our "very stupid" trade deals and policies," Trump tweeted.
"Our jobs and wealth are being given to other countries that have taken advantage of us for years," he said. "They laugh at what fools our leaders have been. No more!"
Trump's enthusiastic embrace of populist economic policy has set parts of his base against one another. Larry Kudlow, a former Reagan official and prominent Republican economist who is a regular CNBC contributor, blasted the tariff decision in an opinion piece published on Saturday.
According to a report in The Wall Street Journal, White House economic advisor Gary Cohn has privately told confidantes that Trump's move against steel imports could prompt his resignation. The president's decision reportedly touched off an internecine battle among his aides, with Cohn's camp ending up on the losing end.
Correction: This article has been updated to reflect that the U.S.-Europe trade deficit totaled more than $151 billion in 2017.