European Union tariffs on U.S. products have gone into force

The US announced tariffs on about US$95b worth of goods from foreign countries

MORRIS MACMATZEN GETTY The US announced tariffs on about US$95b worth of goods from foreign countries

Trump posted his threat on Twitter the day European Union reprisals took effect against USA tariffs on European steel and aluminum.

Many lawmakers have been critical of Trump's use of the trade law, which was rarely applied before he took office.

The EU trade commissioner acknowledged that it had targeted some iconic American items to increase political pressure on the US President and senior US politicians. The countries have hit each other with tariffs on $50 billion worth of goods; Trump has threatened to add another $200 billion. If this investigation finds that the "national security" of the United States is compromised by a reliance on imports, than tariffs can be imposed.

"You could tell on the market, in talking to dealers, that some customers said, I want to fulfill my dream before any tariffs come into effect", he said.

Trump used a similar tactic to unilaterally impose tariffs on aluminum and steel imports from a number of countries, enraging a number of US lawmakers but also his foreign counterparts in Europe, Canada, Mexico, Japan, and a number of other countries.

German automakers Mercedes, BMW, and Volkswagen all have plants in southern states and directly employ more than 20,000 USA workers between them, primarily at those factories.

The Trump administration is investigating whether imported autos pose a threat to US national security. All European Union member states would be affected, Germany in particular, since the country ships approximately 600,000 automobiles to the US every year. Duties at this level could be expected roughly to reduce USA imports of vehicle and auto parts in half.

The tariffs, which took effect at midnight (2200 GMT Thursday) according to the EU's official journal, will further fuel jitters on world stock markets that are already alarmed by trade tensions between the United States and China.

Although a large portion of the US's most popular vehicle models, including those from foreign brands (such as the upcoming BMW X7), are already manufactured within its borders, many are imported from other countries.

American tariffs on steel and aluminum have also hit Canada, Mexico, India, Turkey and China.

EU Trade Commissioner Cecilia Malmström said this week that the 28-nation bloc was "left with no other choice" but to impose tariffs of its own after the "unilateral and unjustified decision of the U.S.". This tweet comes on the back of the EU's decision to slap tariffs on $3B of United States goods earlier today, which specifically targeted industries associated with Trump's base such as bourbon, oranges, and motorcycles in an effort to exert political pressure on the President.

These factors make it unlikely that either BMW or Mercedes would relocate production of their convertibles, or other low-volume niche models, from overseas to the United States.

"The parties that will be most impacted are USA companies", he said.

There could be yet another round of US tariffs.

The United States in 2017 accounted for about 15% of worldwide Mercedes-Benz and BMW brand sales. It accounts for 5% of VW brand sales and 12% of Audi sales.

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