Trump threatens to impose 20% tariff on imported cars from EU

U.S. President Donald Trump on Friday threatened to impose a 20-percent tariff on imported cars from the European Union (EU), according to his tweets.

"Based on the Tariffs and Trade Barriers long placed on the U.S. and its great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!" Trump tweeted.

Trump's tweet came after the Trump administration last month initiated a so-called Section 232 investigation into the national security implications of automobile imports, which has provoked widespread opposition from U.S. lawmakers, business groups and major trading partners.

U.S. Commerce Secretary Wilbur Ross said on Thursday that the Commerce Department planned to wrap up its investigation into automotive imports by late July or August. The department would then have a short window to draw up its report and recommendations before November, according to local media.

The Trump administration had used the same domestic law to unilaterally impose additional tariffs on steel and aluminum imports.

On June 1, U.S. tariffs of 25 percent on steel and 10 percent on aluminum against the EU, Canada and Mexico took effect. The imposition of the new tariffs has been viewed as "pure protectionism" by the EU.

The EU, Canada, Mexico and other countries have announced retaliatory measures against U.S. steel and aluminum tariffs, as the U.S. move may violate the rules of the World Trade Organization (WTO).

The EU said on Wednesday that its retaliatory tariffs on a list of U.S. products in response to the U.S. tariffs on steel and aluminum will come into effect on Friday.

The list of U.S. imports worth 2.8 billion euros (3.24 billion U.S. dollars), which will now face an extra duty at the EU border, includes steel and aluminum products, agricultural goods and a combination of various other products.

Tariffs against the remaining U.S. products valued at 3.6 billion euros (4.2 billion dollars) will take place at a later stage, either in three years' time or after a positive finding in WTO dispute settlement which may occur earlier.

"We did not want to be in this position. However, the unilateral and unjustified decision of the U.S. to impose steel and aluminum tariffs on the EU means that we are left with no other choice," said EU Trade Commissioner Cecilia Malmstrom.

The International Monetary Fund (IMF) said Thursday that the Trump administration's new tariffs against imports threaten to undermine the rules-based global trading system and damage the global economy.

Those protectionist measures "are likely to move the globe further away from an open, fair and rules-based trade system, with adverse effects for both the U.S. economy and for trading partners," the IMF said in a report after concluding the Article IV consultation with U.S. authorities, an annual check-up of economic policies between the IMF and its member countries.

The IMF said the tariffs imposed or proposed by the Trump administration also risk "catalyzing a cycle of retaliatory responses from others, creating important uncertainties that are likely to discourage investment at home and abroad."