Source: The Edge
The European Union almost doubled to 35 billion euros (US$39 billion) the amount of U.S. goods it would hit with retaliatory tariffs, should President Donald Trump follow through on a threat to impose duties on EU cars and auto parts.
European Trade Commissioner Cecilia Malmstrom revealed the increase from an earlier figure of 20 billion euros on Tuesday, when she repeated that the EU would reject any U.S. demand to limit the bloc’s shipments of automotive products to the American market on the grounds they pose a national-security threat.
The 20 billion-euro figure was mentioned in late January by Jean-Luc Demarty, then the director general for trade in the European Commission, the EU’s executive arm, who was succeeded in June by Sabine Weyand. Malmstrom told Bloomberg News on Tuesday that the new amount merely reflects the latest trade statistics.
“We will not accept any managed trade — quotas or voluntary export restraints — and if there were to be tariffs we would have a rebalancing list; it is already basically prepared worth 35 billion euros,” Malmstrom told a European Parliament committee in Brussels earlier in the day. “I would hope we do not have to use that one.”
Being played out in the shadow of a U.S.-China trade war that has unnerved investors worldwide, the transatlantic discord over tens of billions of dollars in European auto exports to the American market risks morphing into a new headwind for the global economy.
Last year, Trump declared American imports of steel and aluminum a national-security threat and imposed levies of 25% and 10%, respectively, on shipments from around the world, including the EU. That prompted the bloc to retaliate with a 25% tariff on 2.8 billion euros of American goods, such as Harley-Davidson Inc motorcycles, Levi Strauss & Co jeans and bourbon whiskey.
A 25% U.S. levy on foreign cars would add 10,000 euros to the sticker price of EU vehicles imported into the country, according to the Brussels-based commission.
U.S. tariffs on European cars and auto parts would mark a significant escalation of transatlantic tensions because the value of EU automotive exports to the American market is about 10 times greater than that of the bloc’s steel and aluminum exports combined. As a result, European retaliatory duties would target a bigger amount of U.S. exports to Europe.
Caterpillar Inc trucks, Xerox Corp machines and Samsonite International SA luggage are among U.S. goods that would face such EU retaliation, a senior European official said in late February on the condition of anonymity.