EU Preparing to Strike Back if Trump Slaps Tariffs on Foreign Cars

VOA News
19 July 2018 (11:04AM)

European Union Trade Commissioner Cecilia Malmstrom says the 28-nation bloc is preparing to retaliate against the United States if President Donald Trump imposes tariffs on foreign autos and car parts.

Trump slapped tariffs on EU steel and aluminum on June 1, which the EU responded to with duties on U.S. products, and is threatening to extend them to the automotive industry.

Malmstrom said at a Brussels news conference hosted by the German Marshall Fund the European Union is compiling "a list of rebalancing measures'' If the United States imposes car tariffs.

New tariffs could hurt Europe's large auto manufacturing and export industry, as well as consumers and manufacturers in the United States, where prices would increase.

Malmstrom and EU Commission President Jean-Claude Juncker will meet Trump next week in Washington. Trump repeatedly berated the European Union during his visit to Europe last week, maintaining the bloc is an unfair trading partner and a "foe."

The European Union said it has tariffs on cars that are about eight-percent higher than those of the United States, but they only apply to about 15 percent of the car market. It said the United States has higher tariffs on trucks and other products.

An EU report on the potential impact of U.S. tariffs on the auto industry says they could prompt U.S. trade partners to retaliate with tariffs on $294 billion worth of American goods, or nearly 20-percent of total U.S. exports.

The report said EU car makers provide about half a million jobs on U.S. soil through direct employment and dealerships, and new tariffs would lower America's Gross Domestic Product by up to $14 billion.

Europe transports nearly $47 billion worth of vehicles every year to the United States. Slightly more than six-percent of working people in the European Union are employed in the automotive sector, according to the European Automobile Manufacturers Association.