US President Donald Trump said on Tuesday he would seriously consider imposing tariffs on cars imported from Europe if a fair deal could not be reached. In addition, he threatened to impose a 100% tariff on French wine. This has again raised trade tensions between the US and the EU. In China, an outbreak of a new coronavirus has sparked global concern ahead of the lunar New Year holiday. As of 23:00 on January 21, 319 cases of pneumonia from the new coronavirus had been confirmed, the People’s Daily reported. As a result, safe-haven currencies such as the yen and Swiss franc rose, while the renminbi fell, while spot gold quickly retreated after a sharp rally on fears it was overbought and taking profits.
Trump: tariffs on European cars will be seriously considered if no deal is reached
US President Donald Trump said on Tuesday he was not bluffing about the possibility of imposing tariffs on European cars.
“They know that if they can’t get a fair deal, I’m going to put tariffs on them,” Mr. Trump told the Wall Street journal.
Mr. Trump’s threat to impose tariffs on a key European export has again raised trade tensions between the United States and the European Union, prompting a backlash from European officials and businesses. The White House has repeatedly delayed a decision on whether to impose tariffs on cars from Europe. Mr. Trump did not give a deadline for a tariff decision.
In addition, Mr. Trump allegedly threatened to impose a 100 percent tariff on French wine.
Trump’s comments on Tuesday came as government and business leaders, including German chancellor Angela Merkel and European Commission President Stephane von der leyen, gathered at the world economic forum in Davos, Switzerland. Mr. Trump met with Ms. Von der leyen on Tuesday after an interview with the Wall Street journal.
Although he did not mention the auto tariffs in an interview with reporters, he said, “we’re going to talk about a major trade deal, we’ve been talking about it for some time.”
Last week, the Washington Post reported that Mr. Trump had threatened to impose a 25 percent tariff on European cars if Germany, France, and Britain did not accuse Iran of violating the terms of the 2015 nuclear deal.
In 2018, trump angered the eu by not excluding it from tariffs on steel and aluminum imports.
In October, the world trade organization cleared the way for the United States to impose tariffs on $7.5 billion worth of European Union goods. It ruled that the eu had unfairly subsidized the aircraft maker airbus.
Trump delivered the keynote address at the world economic forum in Davos 2020 on Tuesday. Speaking at the forum earlier on Tuesday, Mr. Trump praised tariffs for helping bring trading partners to the negotiating table. Mr. Trump said that “perhaps the most transformative aspect” of the US economy since he took office was “our trade reform”. Mr. Trump’s main speech, which boasted of his economic and domestic achievements, drew a muted response, with only one applause at the end.
The new coronavirus triggered a flight to safety: the renminbi fell, the yen and the Swiss franc rose and gold plunged
The renminbi fell off a six-month high against the dollar on Tuesday, while the safe-haven yen rose as a new outbreak of coronavirus infection in China triggered a sudden bout of risk aversion and spooked global markets.
China has reported its fourth death from a new coronavirus. Meanwhile, hundreds of millions of people in China are preparing for the lunar New Year holiday.
As of 23:00 on January 21, 319 cases of pneumonia from the new coronavirus had been confirmed, the People’s Daily reported.
Global stock markets fell as the outbreak revived memories of SARS in 2002-2003. SARS, another coronavirus, broke out in China, killing nearly 800 people worldwide.
Kit Juckes, the analyst at Societe General, said: “The yen and Swiss franc have strengthened and risk aversion is spreading across all sectors. It would be very surprised if it could change the future, but it’s still early days.”
In offshore trading, the renminbi fell nearly 0.7 percent to 6.9126 against the dollar, off a six-month high hit on Monday. The onshore renminbi fell to 6.9094, its lowest level in more than a week.
Currencies linked to Chinese trade and tourism also fell. The Australian dollar hit its lowest level against the U.S. dollar in more than a month at 0.6844. The NZ dollar fell as much as 0.65 percent to 0.6588 before recovering some ground. The won fell by 0.6 percent.
“The market is attributing the selling to sars-like concerns in China, but it’s hard to know if that’s true or if it’s a big reversal in recent price movements,” said Lee Hardman, currency analyst at Mitsubishi ufj in Tokyo.
By contrast, the yen hit as high as 110.23 against the dollar as investors fled to safe havens such as the Japanese currency and US treasuries. The Swiss franc rose to 0.9690 against the dollar.
The dollar index against a basket of currencies fell as low as 97.39 earlier in the day but has since continued to climb from its low to around 97.60.