Brussels prepared to cut US car import tariffs as part of trade pact
Europe and US will deepen commercial ties in effort to stave off trade war
Brussels has said that it is ready to lower tariffs on imported US cars as part of a trade deal with the country, while warning that the bloc will retaliate if Washington attacks Europe’s auto sector with punitive duties.
EU trade chief Cecilia Malmstrom said that Europe was ready to work on a zero tariff trade deal on industrial goods with Donald Trump, following up on a July 2018 agreement to deepen commercial ties.
While Brussels and Washington last year planned talks on “non-auto” industrial tariffs, the EU trade commissioner noted that neither side had excluded the sector from their detailed negotiation objectives, and that talks on the issue were possible.
“We are prepared to put our vehicle tariffs on the negotiating table”, Ms Malmstrom told reporters, as Brussels published its draft negotiation plans for review by national governments.
She said that the EU’s willingness to engage on the issue would depend on what offers the US put on the table in the negotiations, while indicating that this would not require Washington to slash tariffs on pick-up trucks — a particularly sensitive sector.
The trade talks were conceived last year by Mr Trump and commission president Jean-Claude Juncker as a way to stave off a transatlantic trade war after the US president threatened to slap punitive tariffs on some €40bn of EU car imports.
Ms Malmstrom underlined that Europe will retaliate against a range of US imports if such punitive tariffs ever materialise, and that a hit list has already been prepared. The US Department of Commerce is set to report by mid-February on whether EU car imports constitute a national security threat, a key procedural step in preparing possible extra duties.
“That would harm our co-operation”, Ms Malmstrom said. “Should that happen, however, we are very advanced in our internal preparations” to respond.
Tariffs on transatlantic trade in industrial goods are already low — averaging 4.2 per cent for goods entering the EU and 3.1 per cent for the US — but Ms Malmstrom said a further lowering would still have a positive impact given the enormous volume of trade between the two economies.