Eurasia Group | Superforecaster Fridays: Before 1 March 2020, will the US impose Section 232 tariffs on automobiles or automobile parts imported from the EU?
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Superforecaster Fridays: Before 1 March 2020, will the US impose Section 232 tariffs on automobiles or automobile parts imported from the EU?

EURASIA GROUP
17 January 2020
Before 1 March 2020, will the US impose Section 232 tariffs on automobiles or automobile parts imported from the EU?
  • The Superforecasters currently predict that there is a 5% chance the US will impose Section 232 tariffs on the European automobile industry. This is up from last week's 2% figure, but still significantly lower than the 20–30% range, which the figure moved in through the second half of last year.
  • As the phase one deal between China and the United States comes to a close, attention now turns toward US-EU trade talks, which should remain on track in the near term. Section 232 automotive tariffs remain the primary American fulcrum for those negotiations.
  • Eurasia Group sees upward pressure on our base casea 60% chance that the EU will avoid automotive tariffs through the United States' 2020 Election Day. Eurasia Group believes that the political and economic cost of actually imposing automotive tariffs on the EU will stay Trump's hand through Election Day. We are less sanguine on this matter than the Superforecasters because of Trump's political need to have trade targets in an expected close election.
  • Although many Republicans don't support 232 tariffs,  their objection has not stopped the administration from again threatening Europe with auto tariffs after the EU chose not to invoke the dispute settlement mechanism in regards to the Iran nuclear deal. There is a possibility that Trump possesses the legal power to move ahead with this 232 despite the elapsed 180-day period or has other tools at his disposal, notably the section 301 tariffs.
To learn more, read our previous Superforecaster Friday on whether the US will impose Section 232 tariffs on automobiles or auto parts imported from the EU, President Trump's tariffs shake the world economy—once again, and Volatile politics rattle the global economy.
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