The US and the EU have stepped back from a possible trade war, with the announcement of a proposal to ease tensions and avoid more tariffs.
EU warns Trump that raised car import tariffs would hurt US
US president Donald Trump and European Commission president Jean-Claude Juncker yesterday appeared outside the White House confirming they had agreed to stave off proposed car tariffs during negotiations. Trump had previously threatened to impose a 25% tariff on imported vehicles and parts from the EU.
However, Reuters is reporting that a top German industry group is sceptical, saying the tariffs are not yet off the table and there is still no real resolution.
US import tariffs of 25% on steel and 10% on aluminium, implemented in March, will remain in place during the talks.
Three of the world’s biggest car makers have claimed that trade policy changes are having a negative impact, with Ford, General Motors and Fiat Chrysler Automobiles all reporting lower profit or revenue forecasts. Higher steel or aluminium prices are cited as the main cause, with shares in FCA down 11%.
GM CEO Mary Barra said higher costs were already anticipated but “the challenge has become significantly greater than we expected”.
Lawrence Allan
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