EU vows swift response if US slaps duties on European cars

The European Commission has promised a quick and effective response if the US imposes import duties on European cars.

Brussels issued the threat after the US commerce department filed a report on Monday that empowers President Donald Trump to apply car duties within 90 days.

German Chancellor Angela Merkel has labelled as “frightening” the prospect that this report could label European car imports as a national security threat to the US, enabling the tariffs. The White House has used the security argument, that undermining the US manufacturing base impairs military readiness, to impose steep tariffs on steel and aluminium imports.

“Were this report translated into action detrimental to European exports, the European Commission would react in a swift and adequate manner,” EU spokesperson Margaritis Schinas said in Brussels.

The protectionist Trump has threatened 25% duties on European cars, especially targeting Germany, which he says has harmed the American car industry. In 2017, nearly half of the 17-million cars sold in the US were imported, mostly produced in Canada and Mexico, which are expected to be exempt from new car duties.

German car groups exported 470,000 cars to the US in 2018, according to the VDA manufacturers’ federation.

The flare-up followed the truce in July, when Trump and European Commission President Jean-Claude Juncker pledged no new tariffs while both sides pursued a limited trade deal. Juncker “trusts President Trump’s word. The EU will stick to its word as long as the US does the same,” Schinas said.

Apart from economic matters, US-European ties have already been upended over Trump’s approach towards Iran and Syria, as well as other issues.