European Union gives stark warning to U.S. over auto tariffs

Trump's'America First administration is going to trade war with ChinaMore

Europe is "possibly as bad as China" on trade, U.S. President Donald Trump said in an interview broadcast Sunday, with trade wars emerging against both the Asian giant as well as longtime allies in Europe and Canada.

The European Union has warned the United States that imposing import tariffs on cars and vehicle parts would likely lead to counter-measures by its trading partners, Reuters reported.

Against China, the world's second-largest economy, the White House in mid-June announced stiff 25 percent tariffs on Chinese imports, sparking immediate retaliation from Beijing.

Those measures have drawn retaliatory tariffs on billions of dollars of United States exports from major trading partners including China, the European Union, Canada and Mexico.

Canada and the USA are among the world's largest trading partners, with an estimated $673.9 billion in goods and services exchanged in 2017, with the US scoring a small surplus ($8.4 billion), according to USA government data.

The commission said "up to $294 billion of United States exports. could be subject to countermeasures across sectors of the USA economy", which was equivalent to a staggering 19 percent of total U.S. exports in 2017. Retaliatory tariffs would cost billions and kill thousands of jobs.

In a letter to U.S. authorities, the European Commission, which handles trade policy for the bloc's 28 members, painted a stark picture of what the USA economy would face if Trump followed through on his threat.

On Wall Street, shares turned positive in late afternoon trading as investors weighed trade concerns against Commerce Department data that showed USA construction spending increased more than expected in May. Its tariffs are meant to deliver pain to American farmers, who overwhelmingly backed Trump in the 2016 election and whose interests are represented by powerful lobbyists and members of Congress.

The European Commission said the United States investigation into auto imports "lacks legitimacy, factual basis and violates global trade rules", according to CNN Money.

Mr. Trump's administration wants Germany - which would be hardest hit by automotive tariffs - to pressure the European Union to come to an agreement.

For example, the Chamber said Texas could see $3.9 billion worth of exports targeted by retaliatory tariffs; Tennessee, $1.4 billion; and SC, $3 billion.

The trade policies have led to some countries threatening to retaliate, including Canada, which vowed Friday to impose tariffs on $12.6 billion worth of American products until the U.S.'s steel and aluminum tariffs are rolled back.

Looking at World Trade Organization data, however, Canada and many of Trump's other targets are near the bottom of the world in terms of average tariff levels.

Canada has the rate on 6.8% of tariff lines.

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