A full-blown trade war is looking ever more likely with President Trump threatening US allies upset with the tariffs on steel and aluminum imports he announced just days earlier, USA Today reports. "If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!" Trump tweeted Saturday from Mar-a-Lago. The president announced a 25% tariff on imported steel and 10% tariff on imported aluminum on Thursday. Both Canada and the EU called the tariffs "unacceptable," and the EU threatened to retaliate in the form of tariffs on Harley-Davidson motorcycles, Kentucky bourbon, and jeans. Canada also threatened retaliation of its own.
The US was the largest market for cars exported from the EU in 2016, importing over 1 million, CNBC reports. According to the Washington Post, Trump's newest tariff threat mostly targets Germany, which exported $23 billion in cars to the US in 2016. Germany's BMW and Volkswagen employ thousands of workers in factories in the US, and critics say a tariff on their cars would only hurt US consumers. Trump said during his presidential campaign that he wanted to fix trade imbalances with China and Mexico. But his announced tariffs on aluminum and steel would mostly affect Canada, the UK, Germany, South Korea, Turkey, and Japan—all allies of the US. “None of this is reasonable, but reason is a sentiment that is very unevenly distributed in this world,” the president of the EU says. Trump on Friday called trade wars "good and easy to win."
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