President Donald Trump reminded investors Tuesday that Europe, and its $1.2 trillion auto sector, might be next on his tariff hit-list.
Trump tweeted that the euro, as well as other global currencies, are "devalued" against the dollar, which itself is trading a two-and-a-half month low on foreign exchange markets, and that this put the U.S. at a disadvantage in world trade. TheStreet's founder, Jim Cramer, thinks Trump's use of tariffs to extract concessions on non-trade issues, such as with Mexico and immigration, raises huge risks for European carmakers, which could find themselves on the business end of fresh U.S. levies if the President were to use tariffs to compel countries such as Germany and France to increase their NATO spending commitments. Real Money contributor Stephen Guilfoyle said the government is more likely than not to use tariffs for political ends following the weekend agreement with Mexico.
Germany reaffirmed a commitment to increase its military spending to 2% of its GDP by 2024 following a series of tense meetings with Trump at last year's NATO summit, but indicated last month that its 2019 outlay would only rise to around 1.35% and that it would only spend 1.5% of its GDP by the 2024 deadline.