European Union tariffs on U.S. products have gone into force

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President Trump aimed his Twitter fire at Europe on Friday, saying a 20% Trump tariff could soon apply to cars imported from Germany and the rest of the European Union.

Trump has threatened duties on up to $450 billion of imports from China.

Shares of General Motors Co. and other US automakers gave back earlier gains.

"I think the United States is losing more because it has put tariffs on a very important input which very often it doesn't produce itself", Daniel Gross said.

The United States has granted exemptions to some products from Japan and four other countries from its additional tariffs on steel imports, the Commerce Department said Wednesday.

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If a manufacturer wants to introduce a new model on an existing production line, "the assembly sequence has to be the same or it can't be done without spending a lot of money and time", said a US manufacturing consultant, who asked not to be named. German carmakers - including BMW and Daimler made some 854,000 vehicles in the U.S. in 2016.

This will clearly send shockwaves throughout the European Union but particularly in Germany - Europe's largest vehicle producing nation and the country of origin of the vast majority of European cars on American roads.

European Commission President Jean-Claude Juncker, who has said the bloc would target "Harley-Davidson, bourbon and Levi's jeans", said on Thursday the United States decision "goes against all logic and history". Potential tariffs between the European Union and Britain after Brexit and yet more tariffs between Europe and the United States will shrink the market further, auto executives fear. Such a move could raise prices for American consumers and businesses and hit global supply chains for industries like carmakers and electronics.

Trump's trade policies have also escalated conflict with Canada and Mexico as he seeks to renegotiate the $US1.1 trillion North American Free Trade Agreement on terms more favourable to Washington.

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.

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German automakers face broader threats from Trump's shift away from decades of USA policy supporting open trade.

Asked last week how she would react if Trump went through with his plan to impose tariffs on European Union auto exports, German Chancellor Angela Merkel said in an interview: "First we are trying to see if we can prevent that from happening - but I can't predict this, so I don't want to raise any false hopes".

Most of the cars imported to the United States from Europe are luxury models.

That Chicken Tax has been a relative boon for jobs at those production plants, but has also virtually narrowed the number of available makes and models available to shoppers-new products like compact pickups have been hard to make at a profit and relatively slow to market. He told automakers at a White House meeting in May that he was planning tariffs on some imported vehicles.

Juncker said on Thursday that the U.S. decision to impose tariffs "goes against all logic and history".

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The United States in 2017 accounted for about 15% of worldwide Mercedes-Benz and BMW brand sales. It accounts for 5% of Volkswagen's VW brand sales and 12% of its Audi brand sales.

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