Economy Now: Trump Threats to Impose Tariff on Europe Auto Imports
May 15, 2019 | Wednesday
United States President Donald Trump on his next trade battle includes a sheer tariff on Europe auto imports. However, on Wednesday, according to an expert, it wasn't the White House's main goal.
According to David Hauner, head of cross-asset strategy and economics for Europe, the Middle East, and Africa at Bank of America Merrill Lynch, the U.S. actions prove to be a "trojan horse" on its bigger deal for agriculture.
Just last week, President Trump imposed a tariff increase on Chinese goods. As of now, the market's focus is turning to possible ignition of a trade war between the United States and Europe. Since last year, President Trump threatens to impose a 25 percent tariff on European Union car imports. However, President Trump is scheduled to make the final decision on European auto imports on May 18 this year.
Hauner said that the White House could experience a rough road ahead. During an interview, Hauner said that the U.S. attempts to push a few "concessions from Europe." Hauner believes that it will be "very difficult" especially if President Trump truly starts a discussion regarding agriculture.
Hauner also added that there are a few who believes that the tariffs could be a "Trojan horse" which can actually "start discussion" on agriculture. That of which is likely to be the "big business" between the U.S. and Europe. Furthermore, he explained that agriculture and Europe are very politically sensitive in allowing American imports.
The farmers were the key political constituency for President Trump. It is seen to be their weakness in going against trade with China. That of which will likely be the concern for the U.S. President on his 2020 re-election bid.
Ever since President Trump threatens the European autos, he faced with the president of the European Commission and the EU's executive body. Both choose to have an agreement about trade and avoid an increase in tariffs. In about a year since their meeting, both the U.S. and Europe are yet to begin the official trade talks.
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