Trump sees progress on NAFTA, then threatens a 20% tariff on cars from Europe
Another week went by and another round of threats were fired by President Donald Trump concerning trade and the automotive industry.
First, Trump said on Tuesday that progress was being made in slow-moving talks to update NAFTA, but he held out the prospect of striking bilateral pacts if a three-way deal could not be reached.
“We’re trying to equalize it. It’s not easy but we’re getting there,” he told a group of U.S. small business executives, according to a report by Reuters.
The same day, Mexican foreign minister Luis Videgaray said during a press conference in Mexico City that he expected the next negotiating meeting of ministers to be held in July.
Meanwhile in Ottawa, Foreign Minister Chrystia Freeland spared some optimism that a deal to update NAFTA is still possible despite the U.S. decision to impose tariffs on Canadian and Mexican steel and aluminum.
Then came Friday, and the President tweeted another tariff threat, this time targeting imported vehicles from the European Union. Trump said that if the EU does not remove duties on U.S. cars, then the U.S. will have no choice but to act.
Trump’s tweet was promptly read in the financial markets, sending shares of BMW, Volkswagen, Fiat Chrysler and Mercedes-maker Daimler all downhill, with Ford and General Motors shares following shortly after.
The announcement was criticized by representatives of German brands’ auto dealers, who said the measure “will have one of the most negative effects” on Trump’s presidency.
“The cost of the tariffs will have to be passed along to consumers, which will hurt sales,” said officials who called the threat “scary” and “tragic”, according to Bloomberg.
– Volvo inaugurates plant in South Carolina; will rely on at least 29 suppliers from Mexico
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– Steel, aluminum tariffs have already driven up General Motors costs, says CEO