What Happened: According to a draft executive order, U.S. President Donald Trump is considering giving the European Union and Japan 180 days to agree to a deal that would "limit or restrict" exports of automobiles and auto parts to the United States after a U.S. Commerce Department report found that such imports posed a threat to national security, Bloomberg reported May 15.
Why It Matters: By issuing the order, the White House is implicitly threatening tariffs against the European Union and Japan if they do not agree to quotas or some other form of restrictions on their automotive imports. Such a move risks complicating ongoing U.S.-EU trade negotiations, and could also harden Tokyo's position in its Free Trade Agreement (FTA) talks with Washington.
Background: The draft order said the United States would exempt Mexico, Canada and South Korea — the three countries that have already agreed to certain restrictions — from the order as a part of their FTA renegotiations with Washington.
Read More:
- Japan, U.S.: Industrial Giants Take the Slow Road to a Trade Deal (April 12, 2019)
- For Trump's Auto Tariff Threats, Credibility Is the Name of the Game (Nov. 15, 2018)
