From the start of June, the European Union has been hit by tariffs of 25 per cent on steel and 10 per cent on aluminium imports imposed by US President Donald Trump, who has justified the move on the grounds of national security.
Trump had directed the Commerce Deparment to launch an investigation into imported autos in May, similar to the procedure that led to the steel and aluminum tariffs. Germany's top automakers favor ending all import tariffs for cars between the European Union and the US, the Wall Street Journal reported June 20.
The EU trade commissioner has acknowledged that the EU targeted some iconic American items to put political pressure on U.S. President Donald Trump and senior U.S. politicians.
However, China accused the U.S. of an act of "extreme pressure and blackmail" and said it would respond with "strong countermeasures".
Mexico imposed tariffs on American products ranging from steel to pork and bourbon two weeks ago. Industry data shows that German automakers build more vehicles in southern US states that voted for Trump in the 2016 presidential election than they ship to the United States from Germany.
"We do not want to be in this position", EU Trade Commissioner Cecilia Malmstrom said in a statement, adding that the "unilateral and unjustified" U.S. decision had left the EU with no choice. Thus, it's unclear what problem Trump's vehicle tariff is supposed to solve - unless the president believes that auto prices in the US are intolerably low.
President Donald Trump has fueled trade war fears by pledging to impose tariffs of 20pc on imports of European Union cars if trade barriers are not "broken down".
Mexico has already announced its own tariffs on United States goods, and Canada's tariffs on almost $13 billion of U.S. products are set to take effect next month.
The department approved 42 exclusion requests from seven companies in the United States that import steel products from Japan, China, Germany, Belgium and Sweden. Trump wrote on Twitter Friday. The tariffs, which had been announced earlier this year, had previously been expected to come into force next month.
Sales to the USA fell 10 percent to 494,000 vehicles, while Germany automakers produced 804,000 vehicles in the United States previous year.
The equivalent value of €2.8 billion worth of USA goods that will be hit by import duties charged by the EU. Trump praised Mexico's approach to combating illegal immigration, and even said that Mexico's reliance on the U.S.as an export market was acceptable.
The move is a response to new USA tariffs imposed on European Union steel and aluminium by President Donald Trump.