German vehicle shares dip on Trump tariff tweet

US stock markets are feeling the heat as tensions over trade between the US and China seem closer to a boil

RICHARD DREW AP US stock markets are feeling the heat as tensions over trade between the US and China seem closer to a boil

Trump is threatening to impose a tariff double that size if the European Union doesn't remove its barriers.

"We don't want to fight (over trade) in public via Twitter".

This will clearly send shockwaves throughout the European Union but particularly in Germany - Europe's largest vehicle producing nation and the country of origin of the vast majority of European cars on American roads. Lentils will attract 40% instead of 30%. "We will do what we have to do to rebalance and safeguard", he said. Duty on flat-rolled steel products has been hiked to 27.50% from 15% earlier, while certain flat-rolled products of stainless steel will now attract 22.50% duty instead of 15% earlier.

The organisation estimates that a 25% tariff on foreign vehicles and parts for them, assuming the U.S. does not grant exemptions to some countries, would lead to the loss of about 195,000 jobs in the US. This is in response to the United States of America imposing import duty on many Indian products. Now, in threatening some of the world's biggest vehicle makers with punitive tariffs when entering the substantial American auto market, Trump may well be on the verge of breaking the will of European Union political leaders who have previously pledged to resist re-negotiations of existing trade deals with the US. The US has imposed tariffs on Canada, Mexico and £25bn in Chinese goods.

Fiat, which is part of Fiat Chrysler, also imports some non-luxury cars, although it represents a relatively small part of the company's USA sales.

Harley (HOG) says it is getting hit by tariffs twice: Once by the European Union import duty and once by a rise in raw material prices resulting from US steel tariffs. "We believe a punitive, retaliatory tariff on Harley-Davidson motorcycles in any of our major markets would have a significant impact on our sales, our dealers, our suppliers and our customers in those markets", Harley-Davidson said in a statement. Such a move could raise prices for American consumers and businesses and hit global supply chains for industries like carmakers and electronics.

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After the announcement, South Korea, Argentina, Australia and Brazil had agreed to put limits on the volume of metals they could ship to the USA in lieu of tariffs.

The US granted temporary exemptions to the EU, Canada and Mexico amid negotiations over limits. The European Autos Stocks Index fell sharply after Trump's 20% tariff tweet and was last down 1.25%. But the latter rejected India's request.

The Alliance of Automobile Manufacturers, representing major USA and European automakers, said "tariffs raise vehicle prices. limit consumer choice and invite retaliatory action by our trading partners".

This week, Daimler told investors that it was bracing for a trade war between Trump, China, and now Europe, and issued guidance for lower profit expectations based lower sales due to escalating tariffs. "We're like the piggy bank that everybody is robbing", Trump had said.

Trump's comments, Bloomberg noted, come days after the EU triggered tariffs on $3.3 billion of American products, in retaliation to US duties on European steel and aluminum exports.

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