EU delays tariffs on US goods despite 30% levy announced by Trump
Brussels (dpa) The European Union will extend its suspension of tariffs on goods imported from the US until early August, despite Washington's decision to slap a 30% levy on imports from the bloc, European Commission chief Ursula von der Leyen said on Sunday. "The United States have sent us a letter with measures that would come into effect unless there is a negotiated solution," she said. "We will therefore also extend the suspension of our countermeasures till early August."It comes after US President Donald Trump said on Saturday that he will impose 30% tariffs on imports from the European Union starting August 1, despite ongoing negotiations to avert a trade war. In a letter sent to von der Leyen and posted on his platform Truth Social, he complained of the "long-term, large and persistent" trade deficit the US has with the EU, accusing the 27-nation bloc of unfair trade policies and barriers.Trump wrote that his administration would drop the high tariff rate if "the European Union, or countries within the EU, decide to build or manufacture within the United States."Von der Leyen on Sunday stressed that the EU would not stand back and watch, saying her commission would continue to prepare further countermeasures in the coming weeks so "we are fully prepared."
Following Trump's letter, the EU could have imposed initial countertariffs in response to earlier US levies on steel and aluminium products from the bloc from Tuesday after the initial suspension expired.
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Zawya
an hour ago
- Zawya
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Zawya
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Zawya
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It sold 2.3 million vehicles there in 2024, including its Lexus brand, accounting for more than a fifth of its global total. As a source of revenue, North America was second only to Japan in the last financial year. Hyundai's North American revenue was the highest in almost a decade last year. Kim Chang-ho, an analyst at Korea Investment & Securities, estimated it generates around 60% of its profits from the U.S., thanks to higher vehicle prices. Mocked in the U.S. in the 1980s for its perceived shoddy quality, Hyundai doubled down there around a decade ago, especially after tensions between Beijing and Seoul and the rise of domestic EV makers saw it start to lose ground in China. "After years of putting in effort, our brand is finally gaining recognition in the United States," one of the Hyundai insiders said. 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Investors wonder if tariffs could push Nissan to revive merger talks with Honda that fell apart this year. Mazda, which is 5.1% owned by Toyota, and Subaru, which is 21% owned by Toyota, could become more reliant on the bigger company. MORE INVESTMENT? While Hyundai and Kia have three U.S. factories, they still import about two-thirds of the vehicles sold there. Toyota manufactured 1.3 million vehicles in the U.S. last year, equal to 54% of the vehicles it sold there. Japanese automakers have invested more than $66 billion in U.S. manufacturing since the 1980s, building some two dozen plants, according to the JAMA auto lobby group. At a White House event attended by Trump in March, Hyundai announced a $21 billion investment plan, including a new steel factory, and a plan to boost U.S. production capacity to 1.2 million vehicles a year. The tariffs are likely to encourage Japanese and South Korean automakers to invest more into expanding production capacity and localising supply chains to protect their positions, said Justinas Liuima of research firm Euromonitor International. They will also continue to benefit from one aspect of U.S. protectionism: higher tariffs on Chinese EVs, which means they don't face the same Chinese competition in the U.S. that they do in emerging Asian markets, Liuima said. China ships very few cars to the United States, which imposed a 100% tariff on imported Chinese EVs under the previous administration of President Joe Biden. One of the Japanese executives said it wasn't a matter of simply boosting U.S. production, as high costs, especially of labour, would also weigh on profitability. "It is really a game-changer," Julie Boote, analyst at Pelham Smithers Associates in London, said about the potential longer-term tariff impact. Some automakers have held off giving guidance that takes into account tariffs for the full year, meaning investors may be in store for a rude awakening as companies adjust forecasts as they report quarterly earnings, she said. "There's lots of talk that it's already priced in. I don't really think it is."
