The American president has not even rejected his previous promises, the protests of the biggest American car manufacturers, or the fact that the ministry of commerce has not yet determined whether the import of European cars threatens the national security of the US.
Less than a month was the agreement between Donald Trump and the President of the European Commission, Jean-Claude Juncker, to ease the tense trade relations between the European twenties and the United States.
The American president was again threatened by the increase in tariffs for car and car imports from the European Union.
Against his suggestion, domestic car manufacturers are becoming more and more attractive. The European Union has not yet officially responded to Donald Trump's latest announcements.
The risk of oral agreement
"We will introduce a 25% tax on any car coming to the US from the European Union," Trump said during a meeting with his supporters in West Virginia. He also had to inform the Delegation of the Commission, who attended the White House on 26 July, of this step.
However, when Juncker faced foreign journalists after meeting with the US president, he spoke of Donald Trump's promise that Americans would not introduce new tariffs for European car production that would have a major impact on Germany and Slovakia.
"The most important step today is the approval of our American friends that they will not raise car obligations or other products during these discussions, which I consider to be the most important concession of the Americans," added the Luxembourg politician. According to Trump, the outcome of the meeting was "very good for Europe".
In return, the Commission has promised that the EU will increase the purchases of US soy and liquefied natural gas. "The European Union can import more soy beans from the US, and that's what we said," said one week after the Juncker meeting.
The delegation led by the Luxembourg politician therefore spoke after his return to Europe about a meeting with the American president as a success.
The American commitment must be valid during the negotiations on commercial cooperation, which, among other things, should result in the abolition of all tariffs for non-motorized industrial products. The meeting was also a joint written statement from both leaders. The two parties have agreed not to take any action that would be contrary to the spirit of a common agreement.
Great meeting about trading today with @JunckerEU and representatives of the European Union. We have a very strong understanding and all believe in no tariffs, no barriers and no subsidies. Working on documents has already started and the process is going …
– Donald J. Trump (@realDonaldTrump) July 25, 2018
Critics of the agreement have pointed out, however, that the joint statement does not mention the above tasks on cars. Based on an oral deal with Donald Trump, they said they were naïve. He made up for his statement yesterday.
Endangered national security?
The US ministry is still investigating whether imports of cars from the EU endanger the national security of the US. Only in this case would the White House be allowed to raise rates under the current American law of 1962. The defense of national security was also the main argument for increasing import duties on steel and aluminum.
The study, which is therefore necessary for new car tasks, has to be completed in August. Wall Street Journal was quoted Tuesday by company secretary Willbur Ross, the ministry investigates "millions and millions of pages" of questionnaires from US and foreign car manufacturers. "It can not be done in five minutes … we will not be able to do it in August," Ross said before Trump's statement.
At the moment, American car import rates are 2.5 percent. A 10% duty applies to the export of American car production to the EU. Trump calls it Trump several times unfairly.
While the current tariff measures for steel and aluminum are worth about two and a half billion euros, the new round would be more than ten times larger.
But according to Brussels, their introduction would be contrary to the rules of international trade. The Commission has already announced in advance that its own countermeasures have been prepared for this case with the same value, EUR 300 billion.
Not only European but domestic car manufacturers remind Washington that new tariffs, apart from supply chains, will also have a negative impact on consumers in the US.
Some statistics show that even cars, most of which are produced in the USA, often use up to one third of the works of foreign suppliers. Of all cars sold in the United States in 2017, 52 percent were produced on their territory.
Up to half of them, according to the American non-profit Center for Automotive Research, produced foreign car manufacturers such as BMW, Daimler or Honda.
According to the same organization, 715,000 Americans could come as a result of Trump's workload. Car prices would rise on average by almost four and a half thousand dollars.
On Monday American cartels, car manufacturers and salesmen were also opposed to the idea of the American president. The coalition, called "Driving American Jobs," marked an increase in tariffs as "a threat to the US economy." As stated on the initiative page, US GDP will drop by 60 million, the number of cars sold in the US will be reduced by two million a year.
The coalition is the largest American car manufacturer, Ford, Chrysler and General Motors, as well as foreign manufacturers such as Nissan, Honda, Toyota and Ferrari.
"The impact of the proposed targets will be particularly painful for US jobs because it will damage employment in the supply chains," said Matt Blunt, former Missouri governor and head of the American Automotive Policy Council, one of eight new coalitions.
Trump's suggestion is no great support in his administration either. To him is his economic adviser Larry Kudlow, finance minister Steve Munchin, or US trade representative Robert Lichnitzer.