Trump Duties on EU Cars Would ‘Destroy’ Trade Truce, Europe Says

(Bloomberg) -- A trans-Atlantic trade truce would collapse were the U.S. to impose duties on European Union cars or auto parts based on national-security grounds, said a senior EU official.

“If we should be slapped with car tariffs or tariffs on car parts as well, that would clearly destroy the prospect of a positive agenda,” Maria Asenius, the chief of staff of European Trade Commissioner Cecilia Malmstrom, told a conference in Brussels on Monday. “We would have to re-assess our relationship.”

An investigation by President Donald Trump’s administration into whether American imports of cars and auto parts pose a national-security threat has the potential to shatter a parallel EU-U.S. push for a market-opening accord.

Europe has vowed to impose retaliatory duties on its imports of U.S. goods should EU automotive shipments be hit by American levies, a step that would mirror the bloc’s reaction earlier this year to tariffs that Trump introduced on foreign steel and aluminum.

“We have, of course, one dark cloud looming and that is the ongoing U.S. investigation,” Asenius said. “It should be done before mid-February, we assume, but nobody knows for sure and nobody knows what the decision will be after that.”

Meanwhile, she said, the EU is seeking to engage the U.S. in efforts to determine the scope of any negotiations on a deal to cut tariffs on industrial goods traded between both sides.

“The U.S. is actually not ready to do this scoping yet, but we are ready whenever they are ready,” Asenius said.

As a result, the focus so far of EU-U.S. efforts to enact a July 25 accord between Trump and European Commission President Jean-Claude Juncker has been on areas of possible voluntary regulatory cooperation, she said.

Asenius said the U.S. “keeps hoping” that agriculture can become part of any trans-Atlantic talks on a market-opening accord and repeated the bloc’s position ruling out the inclusion of farm goods.

©2018 Bloomberg L.P.