A Movie Coming to Your Local Economy, "Trade Wars". While making sense, may turn out not to make cents.

Trump threatens to tax European auto imports

U.S. President Donald Trump kept up pressure on trading partners on Saturday, threatening European automakers with a tax on imports if the European Union retaliates against his plan to slap tariffs on aluminum and steel. Trump's tweet suggested he is refusing to yield to U.S. business interests

 From article, (U.S. President Donald Trump kept up pressure on trading partners on Saturday, threatening European automakers with a tax on imports if the European Union retaliates against his plan to slap tariffs on aluminum and steel.

Trump's tweet suggested he is refusing to yield to U.S. business interests and foreign trading partners alarmed at the prospect of a trade war that rattled financial markets this week.

"If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S.," Trump wrote on Twitter. "They make it impossible for our cars (and more) to sell there. Big trade imbalance!"

The United States imposes a 2.5-percent tariff on cars assembled in Europe and a 25-percent tariff on European-built vans and pickup trucks. Europe imposes a 10-percent tariff on U.S.-built cars.

"The European Union: brutal. They've been brutal to us," Trump said at a Florida fundraiser. "They've banded together in order to beat the United States in trade.

The United States accounts for about 15 percent of worldwide Mercedes-Benz and BMW brand sales, while it accounts for 5 percent of VW brand sales and 12 percent of Audi sales.

The United States had a $22.3 billion automotive vehicle and parts trade deficit with Germany in 2017 and a $7 billion deficit with the United Kingdom, according to U.S. government data.

Last year, Germany's automotive trade association said "the United States would be shooting itself in the foot by imposing tariffs or other trade barriers."

Trump's threat comes amid mounting transatlantic tension on trade.

On Thursday, Trump said the United States would apply duties of 25 percent on imported steel and 10 percent on aluminum to protect domestic producers. 

Major automakers say the move will hike the cost of cars and trucks.

The next day, European Commission President Jean-Claude Juncker told German television that "We will put tariffs on Harley-Davidson (motorcycles), on bourbon and on blue jeans - Levis." 

Canada also has said it will retaliate for any tariffs on steel and aluminum.

Trump had tweeted on Friday that trade wars are good and "easy to win," roiling U.S. financial markets.)

For More Info

Lithium May Be Overpriced, says Morgan Stanley

Morgan Stanley claims lithium price will plunge 45% by 2021, Pilbara Minerals not fazed

One of the world's most eminent investment banks, Morgan Stanley, has thrown a potential spanner in the works of the burgeoning lithium industry. Despite the gloom, Pilbara Minerals (ASX: PLS) has just secured an $80 million lithium concentrate offtake deal with South Korea's POSCO.

 From article, (Lithium prices have more than doubled over the past two years fuelled by rampant demand for devices and products that use lithium-ion batteries.

Mobile phones, laptops, tablets and electric cars have emerged as the front-running products to which the lithium-ion battery industry is most connected to.

A variety of companies from different sectors have begun to secure ample lithium supplies in order to facilitate ambitious production schedules that are expected to put over ten million new electric cars on the road just in the US alone, within the next 5 years.

Carmakers such as Tesla in the US and BYD in China, who estimate even steeper electric-car adoption rates, are responding to consumer demand for more efficient and reliable vehicles, but this has put pressure on existing supplies which many analysts predicted would be insufficient on a global scale.

But according to Morgan Stanley, Chile as a standalone country “threatens” to add at least 500,000 tonnes of lithium production in the coming years, thereby deflating any lithium inflation fears. The bank also says that “it would take much higher EV penetration rates to offset these surpluses.”

 Morgan Stanley, has thrown a potential spanner in the works of the burgeoning lithium industry.

In a research report published this week, the bank predicts the current growth of electric car sales to undershoot current expectations, thereby stoking fears that previous lithium supply shortages will become a redundancy and possibly leaving stockpiles of the metal unsold.

One of the major takeaways from the report, is that Morgan Stanley stipulates a required rate of 31% of all new cars sold being of the electric variety, for the current rate of lithium supply to balance with demand.

The bank says the current rate of new electric cars sold is only around 2% and would have to rise significantly to at least 31% by the year 2025 to “clear the market.”)

For More Info