Tariffs: EU to retaliate if Trump puts duties on European cars

by Kim Boateng Posted on January 23rd, 2019

Brussels, Belgium: The European Union threatened to impose $22.7 billion in tariffs on U.S. goods if President Donald Trump puts tariffs on cars and auto parts from the European Union.

This could spark a trans-Atlantic trade conflict similar to the one Trump is engaged in with China.

“We shall continue to face a U.S. administration that is content to threaten trade measures against close allies and partners and, in general, to disrupt the status quo in pursuit of its goals,” said Jean-Luc Demarty, director general for trade in the European Commission. “We should stay calm.”

The EU and U.S. said in July they want to “work together toward zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods.”

EU Commission President Jean-Claude Juncker visited the U.S. last year to sign a truce with Trump on further tariffs so the two sides can craft a new trade deal. But the two sides continue to be far apart in their negotiations.

Trump wants to export more agricultural goods to the EU, a move that could compensate for goods not being purchased by China.

The Trump administration will review automotive imports in February. A 25 percent tariff on EU cars could add 10,000 euros to the sticker price of the vehicle. The EU could retaliate by targeting a wide range of U.S. goods. That could affect BMW, Daimler and Volkswagen.

Demarty said any calls for tariffs or quotas by the Trump administration should be rejected on national security grounds.

“We should be ready to respond appropriately and effectively to any new trade restrictions that the U.S. administration may create for us,” Demarty said. “We have prepared a draft list of imports from the U.S. to the value of 20 billion euros on which re-balancing action could be taken.”

Trump could make a decision next month.

Image: If President Donald Trump imposes tariffs on European automakers like BMW, the European Union could retaliate with new tariffs on a wide variety of U.S. goods.

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