Last Thursday, United States president Donald Trump said the US would apply duties of 25% on imported steel and 10% on aluminium to protect domestic producers. This has sparked outrage from other countries and raised fears of a global trade war, which will surely bring no benefits to anyone.

Major automakers say the move will hike the cost of cars and trucks. Neighbour Canada said it will retaliate for any tariffs on the metals. European Commission president Jean-Claude Juncker told German television that “we will put tariffs on Harley-Davidson, on bourbon and on blue jeans (Levi’s).”

In typical fashion, Trump isn’t backing down and has instead kept up the pressure on trading partners, threatening European automakers with a tax on imports if the EU retaliates to his aluminium and steel tariffs plan, Reuters reports.

“If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a tax on their cars which freely pour into the US. They make it impossible for our cars (and more) to sell there. Big trade imbalance!” Trump tweeted. He also said that trade wars are good and are “easy to win”.

“The European Union: brutal. They’ve been brutal to us. They’ve banded together in order to beat the United States in trade,” the president said at a Florida fundraiser. The US had a $22.3 billion automotive vehicle and parts trade deficit with Germany in 2017 and a $7 billion deficit with the UK, according to US government data.

The EU is of course unhappy at Trump’s “America first” protectionist measures. In a speech at Harvard University, European commissioner for competition Margrethe Vestager said the EU will respond to the tariffs “to defend European industry, and the world trading system,” calling Trump’s actions “one-sided protectionist measures, which hurt, not just jobs, but the whole system of rules that makes our global economy work.”

The report points out that the US currently imposes a 2.5% tariff on cars assembled in Europe and a 25% tariff on European-built vans and pick-up trucks. Europe imposes a 10% tariff on US-built cars. However, many cars do not cross the Atlantic, as Volkswagen, Daimler and BMW all build vehicles in the US. BMW employs more than 9,000 workers in South Carolina and its Spartanburg plant is one of the state’s largest employers, for instance.

China may now be the biggest car consumer in the world, but the US is still a large market. It accounts for about 15% of global Mercedes-Benz and BMW brand sales, while it accounts for 5% of Volkswagen brand sales and 12% of Audi sales, the report adds.

This is not the first time that Trump has threatened automakers. In January 2017, he warned German car companies of a 35% border tax on vehicles imported to the US market.