EU to impose auto tariffs if US reneges on pact

Trump rejected an EU offer to eliminate tariffs on cars

The European Union will respond in kind if US President Donald Trump reneges on his pledge not to impose car tariffs, European Commission President JeanClaude Juncker said as trade tensions between Europe and the United States rose again.

Juncker told German broadcaster ZDF yesterday that the EU would not let anyone determine its trade policies. If Washington decided to impose tariffs on vehicles after all, he said, “then we will also do that”.

Trump rejected on Thursday an EU offer to eliminate tariffs on cars and said the EU’s trade policies are “almost as bad as China”, Bloomberg News reported.

Juncker said he had negotiated a “ceasefire agreement” on trade with Trump in July and while such deals were often jeopardised, they were generally respected.

Chancellor Angela Merkel is due to meet Juncker on Tuesday, German government spokeswoman Ulrike Demmer said yesterday. She declined to comment on Trump’s latest remarks but said Germany fundamentally sought to lower trade barriers and promote free trade.

The trade issue was also likely to be addressed when Merkel met French President Emmanuel Macron in France later yesterday.

The EU remains at odds with the United States over the US blocking of the appointment of judges at the World Trade Organisation, over tariffs set for reasons of national security, and over Washington’s tough stance towards China.

US officials frustrated

Trump agreed in July to hold back on threatened 25-per cent car tariffs while the United States and Europe talked about cutting other trade barriers, but US officials have grown frustrated about the slow pace of progress.

Speaking to the trade committee of the European Parliament on Thursday, European Trade Commissioner Cecilia Malmstrom said the EU had “profound disagreements” with the United States.

Malmstrom said a working group that she and US Trade Representative Robert Lighthizer will oversee on the issue was not engaged in formal negotiations.

She added that the EU would be willing to reduce its car tariffs to zero if the United States did the same, going beyond the provisional agreement struck in July which referred only to “non-auto industrial goods”.

Trump agreed in July to hold back on threatened 25-percent car tariffs while the United States and Europe talked about cutting other trade barriers, but US officials have grown frustrated about the slow pace of progress.