Stocks Slump On Report Trump To Unleash Auto Tariffs Next Week
US equity markets and European Auto stocks are plunging after reports that President Trump may introduce car tariffs as soon as next week (suggesting little hope for optimism from the G-20).
WirthschaftsWoche reports that US President Donald Trump may impose tariffs on imported cars as early as next week.
"The investigation report of the Ministry of Commerce is on the table of the President," reported WirtschaftsWoche, citing EU sources.
"Trump will probably decide the tariffs next week after the G20 meeting in Buenos Aires."
The dispute over possible US tariffs on cars from the EU is not over. The Europeans have already prepared a list of retaliatory measures.
The report recommends 25 percent duty on car imports from all countries except Canada and Mexico. There will be no exceptions for certain car types.
"The report recommends as broad a policy as possible."
EU Trade Commissioner Cecilia Malmström will travel to Washington on Wednesday to discuss the issue with US Trade Representative Robert Lighthizer. In July, US President Trump promised EU Commission President Jean-Claude Juncker that he would not impose tariffs as long as the US and EU negotiated a free trade agreement. Trump and Juncker will see themselves on the sidelines of the G20 summit, but an official meeting is not planned.
The immediate reaction was selling in the major US equity indices as hopes for any good news coming out of the G-20 are dashed...
And European auto stocks are also getting hit...
with Daimler and VW down.
And Euro is dropping to two-week lows...
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Sadly, I think the market is hopeful somehow the Democrats will stop Trump from destroying our International free trade. It is sad to watch a so called businessman do so much harm to our economy. It is fortunate the Republicans at least got him to sign a tax cut, but it will not wash away the bad ramifications of his taxation of imported goods, a lot of which is imported in order to fuel our value added economy. It is a case of pinching a penny which costs you a dollar.
The one thing he is right on is taxing (tariffs are just that) just China does nothing. It just shifts production to other even lower cost nations with worse environmental laws. Eventually, labor will not be a factor as production slowly ramps towards automation. It is unfortunate this is not yet the case. If it was the US might be able to effectively bring back mass production, although few jobs will be created at a very expensive cost. Unfortunately if this was the case China would also not be losing its mass production to SE Asia. Then the focus on China would make much more sense.