EU preparing to hit back if US puts tariffs on car imports

FILE - In this file photo dated Thursday, Sept. 10, 2009, car transporters in Ruesselsheim, central Germany. The European Union Trade Commissioner Cecilia Malmstrom said Thursday July 19, 2018, it is preparing measures to retaliate against the United States if US President Donald Trump escalates trade tensions with new auto tariffs. (AP Photo/Michael Probst, FILE)

BRUSSELS — The European Union says it is already preparing measures to retaliate against the United States if President Donald Trump puts tariffs on imported cars and auto parts.

The auto industry is a big employer and exporter in Europe, and the new tariffs could hit the region hard, as well as consumers and manufacturers in the U.S., where prices would rise.

EU Trade Commissioner Cecilia Malmstrom said Thursday that the 28-nation bloc would be forced to impose more "rebalancing measures" if Trump escalates existing trade tensions with the auto tariffs. U.S. tariffs on imported steel and aluminum imports took effect on June 1; the EU responded by imposing duties on American products.

"If the U.S. would impose these car tariffs that would be very unfortunate," said Malmstrom. She said the EU was preparing "a list of rebalancing measures there as well. And this we have made clear to our American partners."

Malmstrom and EU Commission President Jean-Claude Juncker will visit Trump next week at a time of worsening relations with Washington. During a visit to Europe last week, Trump time and again rebuked the EU for being an unfair trading partner and called the bloc a "foe."

Juncker said Thursday night he was "surprised" to hear Trump describe Europe in such a hostile way.

"I grew up innocently thinking the United States and Europe were like brothers," Juncker said during a speech in Madrid.

The EU says it does have higher tariffs on cars than the U.S. — around 10 percent versus 2 percent — but those tariffs only apply to about 15 percent of the car market. The U.S. has higher tariffs on trucks and other products, the EU says.

The EU officials' July 25 visit will seek to contain the damage and Malmstrom will be trying to make sure that the trade conflict does not spread into the lucrative automobile sector too. Malmstrom acknowledged, however, that the U.S.-EU meeting "can be a bit unpredictable."

Earlier this month, the EU published an analysis of the potential economic impact of U.S. tariffs on the auto industry and estimated that it could lead the EU and other U.S. trade partners to retaliate with tariffs on $294 billion worth of American goods, or about 19 percent of total U.S. exports.

It noted that EU car companies are big employers in the U.S., providing jobs to about half a million people through direct employment and dealerships. The tariffs, the bloc said, would hurt U.S. GDP by between $13 billion to $14 billion.

For Europe, there is a lot at stake as companies like BMW, Daimler, Volkswagen, and Fiat Chrysler send $46.6 billion worth of vehicles every year to the U.S. Some 13.3 million people, or 6.1 percent of the employed population of the EU, work in the automotive sector, according to the European Automobile Manufacturers Association.

People also read these

Austrian authorities seeking Hitler double seen...

Feb 11, 2017

US-AUSTRIA-HITLER:Austrian authorities seeking Hitler double seen around birthplace

Alpine skiing: Hirscher wins his first giant...

Feb 17, 2017

US-ALPINE-WORLD-MEN:Alpine skiing: Hirscher wins his first giant slalom gold

Shipulin holds off Fourcade to give Russia...

Feb 18, 2017

US-BIATHLON-WORLD:Shipulin holds off Fourcade to give Russia biathlon relay title

Trump wigs in big demand during Carnival season...

Feb 20, 2017

So many people want to be Donald Trump this Carnival season in Austria that some costume shops have...

Austrian court backs extradition of Ukraine...

Feb 21, 2017

US-UKRAINE-FIRTASH:Austrian court backs extradition of Ukraine businessman Firtash to U.S.

Sign up now!

About Us

The Market Noise is the first place to look when you need financial and economic insights. We deliver the most accurate news in the business and marketing world to you.

Latest News