Analysis: Who Stands to Lose the Most From Tariffs

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July 25, 2018—While U.S. president Donald Trump was scheduled to meet with top European Union executive Jean-Claude Juncker at mid-week, analyzed who has the most to lose if the U.S. imposes all of its proposed auto tariffs.

The U.S. is currently deciding whether to impose tariffs as high as 25 percent on the import of cars and car parts as part of Trump’s efforts to reduce the $566 billion U.S. trade deficit. The proposal has largely drawn opposition from U.S. automakers, along with countries like Japan, Mexico, Canada, and Germany.

According to Bloomberg, the tariffs, if imposed, would make the following impacts:

  • The world economic output would be 0.5 percent less in two years.
  • Car prices would likely increase anywhere from $2,270 to $6,875, depending on where a vehicle was predominantly made.
  • The European Union may target American goods worth roughly 20 percent of the value of the goods hit by U.S. tariffs.
  • Japan, which exports 1.7 million autos to the U.S. annually, could respond with its own costly tariffs.

All those factors are key reasons why the EU’s Juncker planned to bring two main proposals to Trump’s attention at mid-week: an offer to discuss the reduction of levies, and the possibility of broaching a limited free-trade agreement.

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