Trump Car Tariffs Would Hurt Global Growth, EU's Malmstrom Warns
(Bloomberg) -- U.S. tariffs on car imports would deal a blow to the global economy and Europe will retaliate if they’re imposed, European Trade Commissioner Cecilia Malmstrom said.
“It would be very harmful for our economy, it would be harmful for the global economy, and it would be harmful for the U.S. economy, because many cars are produced here in the U.S. with car parts from Europe,” Malmstrom said Thursday in a Bloomberg TV interview.
The EU is preparing a list of American-made products worth 20 billion euros ($22.4 billion) to retaliate against if Trump follows through on car tariffs, said Malmstrom. The list, which isn’t public, still needs the approval of member states, she said.
The Commerce Department last month submitted a report to President Donald Trump after investigating whether car imports imperil U.S. security, a move that could lead to the imposition of duties.
New Trade Front
As Trump tries to put the finishing touches on a trade deal with China, U.S. tariffs on cars are looming as a possible next front in his trade war, a scenario that would sideswipe a European economy already struggling to generate growth.
Earlier Thursday, Malmstrom in a speech at Georgetown Law School in Washington urged the U.S. to negotiate removing tariffs on industrial goods, including vehicles, as a first step to rebuilding trust in their trade relationship before tackling thornier issues.
Malmstrom said the EU is willing to discuss autos in the negotiations, but she reiterated that the bloc wants farm products kept out of talks. The EU’s member countries still haven’t agreed on what they’re ready to put on the table, but Malmstrom said she hopes official discussions will start soon once the EU gets the formal negotiating mandate.
Trump and European Commission President Jean-Claude Juncker reached an agreement in July to “work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.’’ Trump agreed to hold off on auto tariffs while the two sides tried to improve their trading ties.
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