U.S. President Donald Trump could soon implement tariffs for vehicles imported from Europe in a bid to push for a new trade deal.
According to Senate Finance Committee Chairman Charles Grassley, Trump could make good on his threat of a 25 per cent tariff on imported cars and parts, Reuters reports.
“I think the President’s inclined to do it. I think Europe (is) very very concerned about those tariffs… It may be the instrument that gets Europe to negotiate,” Grassley said.
The U.S. Commerce Department will provide its recommendations to President Trump by mid-February, after the department was called upon to investigate car imports on national security grounds last year.
While waiting for the outcome of this investigation, the White House has held back on imposing tariffs on European and Japanese vehicles as it continues trade deal talks.
The European Union currently imposes a 10 percent tariff on vehicles built overseas, while the U.S. taxes passenger cars imported cars with a 2.5 per cent tariff and pickup trucks with 25 per cent.
The Alliance of Automobile Manufacturers believes that tariffs will raise the prices of imported cars by an average of $6,000.
A plethora of car manufacturers have, however, warned Trump of what could happen if he follows through with threats of a 25 per cent tariff. They claim that this would raise cumulative prices for U.S. vehicles by $83 billion annually and result in hundreds of thousands of job losses. They also assert that there is no evidence auto imports are a national security threat.