US President Donald Trump has lashed out at European Union trade policies again this weekend, repeating threats to tax EU car imports unless the bloc drop their own set of tariffs on US goods.

Tweeting on Saturday, Trump said: “If they drop their horrific barriers & tariffs on US products going in, we will likewise drop ours.”

Trump accused EU countries of “complaining” about new trade tariffs on steel and aluminium imports introduced on Thursday, while upholding its own set of taxes on US products.

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By GlobalData

Why it matters:

Trump’s trade policies have sparked threats of retaliation from major US trading partners, who accuse the President  of escalating a trade war.

The opening salvo was launched by on January 23, when Trump imposed steep tariffs on imported solar panels and washing machines.

Germany, the world’s largest exporter of automobiles, exported a total of $151.9 billion of cars in 2016, accounting for 21.8% of the world’s car exports.

The US is the third-largest car exporter globally after Germany and then Japan.


As a global car manufacturing hub, the country will be hard hit if Trump follows through with his threats.

In an address made to a rally in Pennsylvania on Saturday, Trump zeroed in on the two car-makers:

Open up the barriers and get rid of your tariffs,” Trump said of the European Union’s trade policies in a wide-ranging and rollicking address in Pennsylvania Saturday. And if you don’t do that, we’re going to tax Mercedes-Benz, we’re going to tax BMW.

Jobs and the car manufacturing industry in the US could also be at stake, as the two companies have huge investments in assembly plants in Alabama and South Carolina, where they employ a total of 12,500 people.


In a sign that the US is becoming increasingly isolated for its growing protectionism, 11 countries moved to cement a new trade alliance by signing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in Santiago on Thursday.

The trade pact, was a revision of the TPP-11, devised by the US in 2016 to counter China’s growing dominance in the Pacific region, but Trump pulled out shortly after taking office.

Trump first threatened to tax EU cars on 3 March, two days after he announced a 25% levy on steel imports and 10% tax on aluminium.

Following the first round of threats, shares in  Daimler fell 0.5%, while BMW dropped 1.2%.

The EU is pushing for exemption from the tariffs, with EU trade commissioner Cecilia Malmstroem tweeting that, the EU should excluded on the grounds that they are a close ally of the US.