Trump vows to tax European cars if the EU fights back with tariff on U.S. goods

Doug Stanglin | USA TODAY

Show Caption Hide Caption Trump defiant over tariffs President Donald Trump said trade wars were "good," expressing defiance amid global criticism of his plan to slap tariffs on steel and aluminum imports.

In the first rumblings of a potential trade war, President Trump punched back Saturday at Canadian and European warnings that his steel tariff plan is "unacceptable" by threatening to slap a tariff on European cars if they try to take him on.

The latest volley out of Mar-a-Lago came two days after Trump first announced plans to impose a U.S. tariff of 25% on steel imports and 10% on aluminum.

That, in turn, was met by a sharp rejection from Canadian Prime Minister Justin Trudeau who called the tariffs "absolutely unacceptable" and said they would cause serious disruption of markets on both sides of the border.

If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance! — Donald J. Trump (@realDonaldTrump) March 3, 2018

His foreign minister, Chrystia Freeland, warns that Canada is prepared to "take responsive measures to defend its trade interests and workers," Reuters reports.

European leaders also weighed in. Jean-Claude Juncker, president of the European Commission, told the German media that the EU would respond with tariffs on such U.S. products as Harley-Davidsons, Kentucky bourbon and bluejeans.

“None of this is reasonable, but reason is a sentiment that is very unevenly distributed in this world,” Juncker said.

From his weekend perch, Trump made it clear that such talk would only stoke American resolve.

"If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S.," he tweeted. "They make it impossible for our cars (and more) to sell there. Big trade imbalance!"

The tweet underscored his observation on Friday that when the U.S.is losing "many billions" on trade with virtually every trading partner "trade wars are good and easy to win."

Dieter Kempf, head of the Federation of German Industries, warns that Trump was risking a “spiral of protectionism” that in the end would cost American jobs, as well as those in Germany and the rest of Europe, The New York Times reported.

For now, Canada was feeling the most acute pressure as the top supplier to the United States of both steel and aluminum, exporting nearly 90% of its steel to the U.S.

"Any disruption to this integrated market would be significant and serious, Trudeau said.

These proposals, he added, "are going to hurt them every bit as much as they are going to hurt us, and we are confident we're going to continue to be able to defend Canadian industry."

While Trump has routinely singled out China for its steel and aluminum exports to the U.S., the president, in his off-the-cuff remarks on Thursday, did not say specifically whether Canada and/or Mexico would be subject to the new measures.

If he aims only at China, however, he would hit a mighty small target since China accounts for only 2.9% of U.S. steel imports.

Canada, on the other hand, is the biggest supplier, accounting for 16% of U.S. steel imports, or $4.3 billion in 2017, followed by South Korea, Mexico, Brazil and China, according to data compiled by Wood Mackenzie.

The Wall Street Journal, quoting an unidentified senior White House official, reports that Trump plans to apply his tariffs globally and won't exempt allies such as Canada and Europe.

That is hardly surprising, given Trump's ire in the past over Canada's export policies.

Last year, in a flareup over milk pricing and softwood lumber, the president took a swipe at the neighbors to the north, warning people not to be fooled by Canadians' friendly demeanor, the The Globe and Mail reported.

"Canada's been very rough on the United States. Everyone thinks of Canada as being wonderful, and so do I, I love Canada," he said. "But they've outsmarted our politicians for many years."

