Trump Threatens Europe with a 20 Percent Tariff on Cars

US President Donald Trump, left, and German Chancellor Angela Merkel attend the panel discussion "Launch Event Women's Entrepreneur Finance Initiative" on the second day of the G-20 summit in Hamburg, Germany, Saturday, July 8, 2017. (Patrik Stollarz/Pool Photo via AP)
Patrik Stollarz/Pool Photo via AP

President Donald Trump said Friday that if the European Union does not remove its tariffs on American-made cars, the U.S. will respond by imposing a 20 percent tariff.

The Trump administration is investigating whether imported autos pose a threat to U.S. national security. The investigation is being conducted under the same provision of the law, known as Section 232, that led the administration to impose tariffs on imported steel and aluminum.

German automakers this week reportedly told U.S. ambassador Richard Grinnell that they would support dropping the EU’s ten percent tariff in order to avoid the threat of a Section 232 tariff. German automakers also want the U.S. to drop its tariff on light trucks, a category that includes SUVs and pickup trucks.

Trump’s tweet seems to indicate that no deal on tariffs was struck this week. Shares of European automakers, such as BMW and Volkswagen, fell after Trump’s tweet.

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