US President Donald Trump has announced a plan to impose tariffs on goods from countries that charge higher tariffs on US products than the other way around. The move, which appears to be targeted at the European and German automotive industries, instructs US Trade Minister Howard Lutnick to bring the counter-tariffs into effect. “Whatever a country charges the US, we will charge them back” Trump said.
The new tariff system is set to take effect in early April. The move is a blow to the European automotive industry, as the EU charges a 10% tariff on imported US vehicles, while the US imposes a 2.5% tariff on EU imports.
Trump has specifically taken aim at German producers, pointing out that millions of cars from BMW, Mercedes and Volkswagen are imported to the US without the US doing anything to stop it.
The trade dispute is not new. Former US President Barack Obama had also criticized Germany’s trade surplus with the US, urging the country to strengthen domestic consumption and increase imports from the US.
Trump’s move is a continuation of this approach, with the aim of countering what he sees as Germany’s “beggar-thy-neighbor” policy. The US president also views value-added taxes (VAT) in many countries as a form of tariff and has threatened to impose tariffs in response to these taxes, which he claims harm the import of US products.
Trump’s trade policy goal is to bring jobs back to the US. This is not a new development, as the previous administration had also taken steps to attract foreign companies to the US, including through subsidies and low energy costs. BMW and Volkswagen already have production facilities in the US.