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.
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.
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.
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!”
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.