EU warns tariffs on $23b in US goods if Trump taxes cars

Bloomberg

The European Union is prepared to hit 20 billion euros ($22.7 billion) of US goods with tariffs should President Donald Trump follow through on a threat to impose duties on EU cars and auto parts, said a senior trade official for the bloc.
The assertion by Jean-Luc Demarty, director general for trade in the European Commission, the EU’s executive arm, highlights the risk of a sudden escalation in trans-Atlantic commercial tensions following a truce struck six months ago.
“We shall continue to face a US administration that is content to threaten trade measures even against close allies and partners and, in general, to disrupt the status quo in pursuit of its goals,” Demarty told a European Parliament committee on Wednesday in Brussels.
“We should stay calm.”
Europe is bracing for more possible US curbs on imports while seeking to show progress in enacting a political accord reached at the White House in July to “work together towards zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.” Last week, the commission unveiled a blueprint for a free-trade deal with the US that would cut tariffs on a wide range of industrial goods including cars.
The July 25 pact between Trump and commission President Jean-Claude Juncker put on hold threat of US tariffs on EU cars and auto parts that would be based on the same national-security grounds invoked for controversial American levies on foreign steel and aluminum. A US probe of automotive imports is due to be completed in February.
The metal duties as high as 25 percent prompted tit-for-tat retaliation by the EU last year on 2.8 billion euros of imports of a range
of US products including Harley-Davidson Inc motorcycles and Levi Strauss & Co jeans, with the bloc reserving the right to target a further 3.6 billion euros of American goods by late March 2021.
US tariffs on European cars and auto parts would mark a significant escalation of trans-Atlantic 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.