Whose heart is the war that continues to spread the trade war?

Just after the Sino-US trade war basically started the "first shot", this potential war continued to spread to other parts of the world, and even burned to the long-term US allies - the EU, Japan, Canada and so on.

Earlier, the US Department of Commerce launched an investigation into whether car imports would pose a threat to national economic security. The investigation has not yet been completed, and Trump threatens to impose a 25% punitive tariff on all imported cars and parts. This move has deeply touched the sensitive nerves of various countries and economies in the global automotive industry chain. .

In turmoil and anxiety, no one wants to let the trade war happen so easily. So, in the past week, the various plots of the Arabian Nights were quickly combined. While holding the group to warm up, while the "mouth cannon" continued, while playing a small abacus, they negotiated. The game around the tariffs of cars has also entered a critical time node. I wonder where it will lead the entire industry?

EU and Japan

According to Reuters news on July 17, after the Sino-German cooperation, the EU and Japan also quickly held a group. The two sides recently signed a trade agreement, the EU will cancel the 10% tariff imposed on imported cars from Japan and the 3% tariff on related parts.

The move will boost the competitiveness of Japanese automakers such as Toyota, Nissan, Honda and Mazda in the European market and is expected to gain a larger market share. At the same time, the benefit will be only for the whole vehicle companies, and parts suppliers such as Denso, Aisin Seiki and JTEKT will also benefit from it.

On the one hand, Trump wants to impose a punitive tariff, and on the other hand, the EU and Japan hold mutual tariff reductions. This "US east, we are west" approach reflects the subtle changes that are taking place in today's global relations. The United States under Trump's administration is alienating long-term partners such as the European Union, NATO and Canada. The near-exemption of trade tariffs between the EU and Japan has also created the world's largest trade open zone, designed to respond to US government trade protectionism policies.

"People are increasingly worried about protectionism, but I hope that Japan and the EU can lead the world under the banner of free trade," said Japanese Prime Minister Shinzo Abe.

Donald Tusk, president of the European Council, commented: "The message we want to convey is very clear, that is, to oppose protectionism. The EU and Japan will always open the door to cooperation."

The EU's internal opinions split, and the prospects for negotiations in the US are unpredictable.

On the one hand, it is quickly warming up with its partners, and on the other side is an active mediation with Trump. The EU has recently been able to break the heart of potential car tariff threats.

On July 25th, a turning point in history will be ushered in. According to Bloomberg News, a delegation of senior EU officials headed by European Commission President Jean Claude Juncker went to the United States to negotiate with the Trump administration. The two sides will focus on whether it is possible to reduce US auto tariffs on the EU in the future.

According to officials familiar with insider, the EU is considering two possible negotiating options, and one of the more likely ones is to sign the so-called Plurilateral Sectoral Deal. According to the existing rules of the WTO, the EU cannot reduce the tariff on imported cars by 10% for the United States alone, and once the tax is reduced, it must be applied equally to all WTO members. However, the WTO allows certain countries to sign "Future Agreements" for certain industries. Such agreements can be signed by the member states voluntarily, as long as they do not violate the basic principles of "most favored nation treatment", they can be effective between signatory countries, and Applicable to other WTO members.

This kind of agreement is signed faster, and it does not need to be voted by 164 WTO members, only the countries that need to sign the agreement. This is also considered to be one of the effective ways to resolve European and American auto tariff disputes.

But White House officials privately stated that Trump is not interested in this solution. Trump believes that the tariff mechanism in Europe and the United States was unfair. The EU imposed a 10% tariff on imported American cars, while the United States only imposed a 2.5% on imported European cars. "We have reiterated that if the negotiations are not based on fairness, then we will have a lot of retaliatory measures. These measures make the United States infinite, but we do not want to use it easily," Trump said.

Juncker said that he was "optimistic and relaxed" about the prospect of the US-to-US talks, but he also stressed that the EU will not be intimidated by threats. "We will continue to respond in a resounding manner to the US provocation against the EU." It is reported that if the negotiations fail, Trump will take effect on the EU's punitive car tariffs, then the EU will impose high tariffs on US coal, pharmaceuticals and chemical products, and the scope of the attack will be broader.

Although the EU’s apparent attitude is tough, its internal internal negotiations have caused great differences. For example, the automobile industry relies heavily on the US market. Germany exported 640,000 vehicles to the United States last year. It is eager to find a solution to the US negotiations as soon as possible, and even make some concessions in order to reach a settlement. France, which is relatively less dependent, believes that the tariffs imposed by the United States have been fixed, and the effect of negotiations on changing the situation is minimal.

The US industry collectively boycotts the taxation plan

If the EU is in the midst of a dilemma center, the Trump administration, which seems to be sitting on the Diaoyutai, is not going smoothly. Just as the US Department of Commerce launched an investigation into whether auto imports would pose a threat to national economic security and Trump threatened to impose punitive tariffs on cars and parts, there was a wave of revolts in the United States. The voice of the industry to resist the trade war is getting stronger and stronger.

Prior to this, GM, Toyota, Fiat-Chrysler and other car companies have "written" the US Department of Commerce, demonstrating the risk of trade wars, employment reduction, and investment stagnation that the trade war may bring to enterprises.

On Thursday, at the hearing held by the US Department of Commerce, representatives representing various stakeholders in the US auto industry attended and brought scientific research on the potential impact of trade wars to persuade the Ministry of Commerce to investigate the defaults. It is not true, and the trade war is also harmful to the United States.

Peter Welch, president of the American Automobile Dealers Association (NADA), said in his testimony: "25% of punitive tariffs will hurt manufacturers, dealers and consumers, and the biggest victims will It is a consumer in the United States."

John Bozzella, president of the Global Automobile Manufacturers Association (AGA), stated in his statement that Trump’s motivation to launch a trade war was unreasonable. "At present, the Ministry of Commerce has not put forward any theory that can stand up to explain the inevitable connection between imported cars and US national security, but is eager to break the balance of trade in the industry."

Not only that, but the haze of trade wars has already affected the US auto industry, especially in the automotive industry, Detroit, Michigan. On July 12th, the New York Times published "The Sino-US Trade Wars Linked to the Heart of Michigan." According to the report, in the past few years, China has invested billions of dollars in Michigan, acquiring factories that are on the verge of bankruptcy, opening new factories, and creating more than 10,000 jobs. However, Michigan’s economic partners are seen by Trump as “economic enemies”.

“I don’t think Chinese people come here to steal technology or steal intellectual property,” said Larry Williams, president of Hennigus Motors. “I think Chinese companies come here for learning, not for Xuecheng brought back to China, or left North America, but to establish a global enterprise."

Michigan is home to more than three-quarters of automotive R&D projects in North America. The "North American old auto industry base" caught in the trade war is anxious and helpless. If you want to maintain its advantages in the fields of emerging autopilot and artificial intelligence, you can't get rid of the dependence on China and other international markets, and the Trump administration. The move is tantamount to "reverse action." And this has become the epitome of the torn American society.

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