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‘I Expect Them Before Christmas’: Trump’s Auto Tariffs Now Appear Foregone Conclusion

"The U.S.A. is booming!"

Donald Trump is mad at cars and people who make them.

Specifically, he’s mad at General Motors because they can’t sell enough of certain kinds of cars to keep factories open in key states. But he’s also mad at foreign automakers because they sell cars to U.S. customers who might otherwise be buying the cars GM can’t sell.

Read more

‘They Better Damn Well Open A New Plant’: General Motors As Public Enemy No. 1

So, in order to get back at cars, he’s going to slap tariffs on them to teach cars a lesson.

On Tuesday, WirtschaftsWoche, suggested Trump has the Commerce Department’s report on auto tariffs literally sitting on his desk, which means he’s probably just itching to move ahead with the long-rumored levies.

“US President Donald Trump may impose tariffs on imported cars as early as next week”, WiWo wrote, adding that “the Europeans have already prepared a list of retaliatory measures.”

Fast forward to Thursday and WirtschaftsWoche is out reporting that European Budget Commissioner Guenther Oettinger expects Trump to move ahead with auto tariffs next month. “I expect them before Christmas”, Oettinger said Thursday. That, WiWo remarks, makes him “the first member of the European Commission to make public forecasts on the timeframe of US car taxes.”

Needless to say, this was yet another blow for Europe’s worst performing sector of 2018. The SXAP immediately dipped on the headline.

SXAP

(Bloomberg)

This has been an absolutely God-awful year for the index, which is down nearly 31% from the highs. The threat of auto tariffs has never truly dissipated despite Trump’s farcical Rose Garden presser with Juncker in July.

SXAPHighLow

(Bloomberg)

Meanwhile, Trump was tweeting about cars at 6:37 in the morning on Thursday.

“General Motors is very counter to what other auto, and other, companies are doing”, he insisted, in an absurdly transparent effort to dispel the idea that GM’s job cuts and factory closures are stone, cold proof that his campaign promises were just nebulous balderdash. “Auto companies are pouring into the U.S., including BMW, which just announced a major new plant”, he continued, before screaming that “The U.S.A. is booming!”

Read more

Man Who Bankrupted Six Businesses Threatens To Cut Subsidies To General Motors On Twitter

This comes a day after the President informed Twitter that he has now learned about the Chicken Tax. “[That’s] the reason that the small truck business in the U.S. is such a go to favorite”, he tweeted on Wednesday, as if he were telling everyone something they didn’t already know. “If we did that with cars coming in, many more cars would be built here.”

In any event, it looks like the auto tariffs are coming irrespective of what happens at the G20 between the Trump and Xi. And that means Autos & Parts will likely remain Europe’s worst performing sector through year-end.

SXAPYTD

(Bloomberg)

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1 comment on “‘I Expect Them Before Christmas’: Trump’s Auto Tariffs Now Appear Foregone Conclusion

  1. Trump has just explained that he’s discovered the “chicken” tax on light trucks, although I doubt anybody has explained why it’s called that. Theoretically the EU could call his bluff by agreeing to drop tariffs on US cars that nobody in Europe (and America) wants anyway. I say theoretically, because Trump would never agree to dropping the “chicken” tax now that he’s discovered the part it’s played in boosting US manufacturers sales of light trucks. In fact, getting the EU to drop its “unfair taxes” on US imported cars would be a win equal to his win in getting South Korea to raise its allowance of US car imports from 25% to 50% when they didn’t even reach the 25% target.

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