Trump May Impose New Tariffs On Cars, Republican Senator Says

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A prominent senator suggested on Wednesday that President Donald Trump is likely to move forward on new tariffs targeting automobile imports entering the U.S.

Trump’s possible tariffs would target the European Union specifically, and raise car tariffs up to 25 percent on all imported vehicles entering the country. Presently, the U.S. imposes a 2.5 percent tariff on car imports, with a separate 25 percent tariff on pickup trucks coming from the EU, according to reporting from Reuters. The EU imposes a 10 percent tariff on automobiles.

A report is due from the Commerce Department on recommendations over whether the tariffs would produce a positive outcome or not. Sen. Chuck Grassley (R-Iowa) believes that Trump is leaning toward the idea of imposing the tariffs, and said he’s hopeful that it will result in negotiations between the trade partners.

“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 added that he’s not a big fan of increasing the tariff rates himself. But, he also said he understands that talks of tariffs and following through by implementing them “are a fact of life when Trump is in the White House,” he said.

The idea of automobile tariffs being implemented against the European Union or elsewhere is not being welcomed by everyone, however. Automobile companies are against them being imposed, suggesting that a 25 percent tariff on all cars could raise prices for them by $83 billion. They also cited that the costs could affect jobs in the market, in the number of hundreds of thousands of workers globally.

Indeed, additional reporting from Reuters points to estimates made by Trade Partnership Worldwide LLC, a consulting group that looked into what effect auto tariffs could have. According to that organization’s calculations, tariffs could affect around 5,000 jobs in the U.S. alone, and 400,000 jobs around the world.

Trade talks with the EU have been ongoing for quite some time now, according to Vox, and the threat of tariffs is seen by the Trump administration and its supporters as producing net positives for the nation. Yet there have been downsides to the escalation of so-called “trade wars” under Trump.

U.S. farmers, in particular, felt a tremendous crunch when Trump imposed tariffs on China, especially when that nation responded in kind with tariffs on its own. Trump promised to bail out farmers with billions of dollars of help to farms across the country, but the present partial government shutdown has delayed those payments from being made, the Washington Post reported.