Trump import tariffs on Chinese goods will heavily impact Moog

Robyn Valdez
July 3, 2018

The EU sent a submission to the U.S. Commerce Department on Friday claiming tariffs on EU automobiles could increase costs for manufacturers in the U.S.

The European Commission reportedly sent a letter to the USA threatening to hit $US300 billion of American goods with tariffs.

President Trump's administration last month launched an investigation into whether auto imports posed a national security threat and Trump has threatened to impose a 20 percent tariff on all imports of EU-assembled cars.

European Union threatens to retaliate in growing trade war, if the United States places tariffs on European cars, the FT reports.

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Roughly half of the circuit boards Moog use in their instruments come from China, Moog say that they do try to source their boards from the U.S. where possible, but it results in roughly 30% higher costs, so its not possible to source exclusively domestically.

The bloc argues that for some goods, such as trucks, United States import duties are higher.

As a trading partner, the European Union is "possibly as bad as China, only smaller", US President Donald Trump said in an interview with the right-wing Fox News channel on Sunday.

Moog isn't the only United States business facing problems because of Trump's trade tariffs. "Look what they do to our farmers".

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Moog has run operations in the U.S. for over sixty years and employs around 100 people.Half of the components they use to make the boards come from China, and the 25% import tax will make manufacturing Moog synthesizers considerably more expensive.

So far, the EU has only imposed duties on $3.2 billion of USA products such as whiskey and peanut butter, as retaliation for President Trump's tariffs on imported European steel and aluminum. Now in all fairness they have their farmers.

"We have right now a 2.5% tariff on all cars that come in and if you're an European Union vehicle seller you figure this into your business strategy, okay, we're selling to the USA - we have this relatively minor tariff, 2.5% to deal with, if that was to increase tenfold, it's gonna be a huge problem", said global trade expert Alex Lawson. The U.S. has higher tariffs on trucks and other products, she said.

The European vehicle industry in the United States supports some 120,000 jobs in its factories that are mainly in the southern region of the country.

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Those measures would apply "across sectors of the USA economy", the letter reportedly said. On Sunday, Canada started imposing tariffs on billions of dollars of USA goods in response to the Trump administration's duties on Canadian steel and aluminum.

Other reports by Info About Network

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