U.S. President Donald Trump threatened to impose a 20 per cent tariff on all European Union-assembled cars coming into the United States, a month after the administration launched an investigation into whether auto imports pose a national security threat.
Brussels imposed the raft of duties on U.S. products worth 2.8 billion euros (S$4.4 billion) in a tit-for-tat response to Trump's decision to slap stiff tariffs on European steel and aluminum exports.
European Union trade officials have described the USA tariffs on steel and aluminum - justified by the Trump administration on grounds of national security -- as "illegal".
A spokesman for Prime Minister Theresa May said she expects to discuss trade tariffs with the United States president during his United Kingdom visit in July.
The goods targeted include typical American exports like bourbon, peanut butter, cranberries and orange juice, in a way that seems designed to create the most political pressure on President Trump and US politicians. Industry data shows that German automakers build more vehicles in southern US states that voted for Trump in the 2016 presidential election than they ship to the United States from Germany.
The levies are in retaliation to United States president Mr Trump who imposed tariffs on steel and aluminium imported from the EU.
It is hard for the White House to unilaterally impose tariffs without input from Congress, but Trump has found several ways to do it this year. The new tariffs will go into affect August 4.
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The U.S. tariffs hit some $7.5 billion of European products; the EU says that today's measures target almost half that figure, and that it plans to impose a slightly larger block of tariffs later - either in three years, or if/when the WTO rules in its favor.
The U.S.is also locked in a tariff showdown with China, after President Trump said he would use the import taxes to try to shift the balance of trade between the world's top two economies.
"80% of Mexico's Exports come to the United States".
One of the most frequently discussed items on the E.U.'s list is bourbon, a specialty from the home state of Senate Majority Leader Mitch McConnell (R-Ky.).
Other countries hit by the U.S. tariffs have also retaliated, raising fears of a global trade war. India and Turkey have already targeted US products, ranging from rice to autos to sunscreen.
Economists noted that the amount of money involved with India's levies dwarfed in comparison with that of China - U.S. -India trade was $126 billion previous year, while U.S.
Jonathan Davis, owner of a wealth management firm, said the European Union was "on a hiding to nothing" by clashing with Mr Trump.