Trade War: Europe Readying Retaliatory Duties for Prospective Auto Tariffs

Matt Posky
by Matt Posky
trade war europe readying retaliatory duties for prospective auto tariffs

The European Union is keeping the possibility of retaliatory tariffs against the U.S. on the table should President Donald Trump follow through on threats to impose new duties on automotive goods.

European Trade Commissioner Cecilia Malmstrom criticized Trump’s suggestion from May that EU cars and auto parts shipped into the American market posed a national security risk. The administration has issued a mid-November deadline to decide whether to not it’s worth trying to mitigate vehicle-related imports.

Why is this coming back up? November is fast approaching and, with the U.S. winning right to slap the EU with billions of euros in punitive fees thanks to the Airbus dispute, Europe is getting worried it’s heading for tariff town. Washington has already strongly hinted that it would follow through with tariffs if it won its case with the World Trade Organization and has prepared a broad list of EU products, including those stemming form the automotive industry.

“We firmly reject that we are a security threat,” Malmstrom said on Friday. “That is absurd. If there will be tariffs there, we would take countermeasures.”

Her five-year term as EU trade commissioner ends on October 31st. According to Automotive News, she is slated to be replaced by current European agriculture chief Phil Hogan — the outlet added that he had previously referred to President Trump as “reckless.”

From Automotive News:

Last year, Trump infuriated Europe by declaring American imports of steel and aluminum a security threat and imposing levies of 25 percent and 10 percent, respectively, on shipments from around the world including the EU. That prompted the bloc to retaliate with a 25 percent tariff on 2.8 billion euros ($3.1 billion) of American goods such as Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey.

A 25 percent U.S. levy on foreign cars would add 10,000 euros ($11,000) to the sticker price of EU vehicles imported into the country, according to the Brussels-based European Commission, the bloc’s executive arm.

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. As a result, European retaliatory duties would target a bigger amount of U.S. exports to Europe.

Washington has estimated the amount of damages resulting from EU subsidies that are still in place at roughly $11 billion. A parallel complaint filed into the WTO by the Europe has alleged illegal U.S. subsidies for Boeing. The EU expects the outcome of that case to give region to retaliate with its own tariffs sometime next year. Ideally, it’s hoping to avoid new tariffs altogether and reach an agreement with Washington.

[Image: servickuz/Shutterstock]

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6 of 18 comments
  • Jeff S Jeff S on Sep 20, 2019

    We need to be on good terms with our allies if we want to negotiate on trade with China. Going it alone is not the answer. There is more power in having our allies with us when negotiating with China.

    • See 1 previous
    • JD-Shifty JD-Shifty on Sep 24, 2019

      @Lorenzo Useful idiot to Russia much?

  • Luke42 Luke42 on Sep 21, 2019

    Wow, who saw this coming? /s Oh, right, everyone who ever took a macroeconomics course.

    • See 1 previous
    • ToolGuy ToolGuy on Sep 24, 2019

      @Lorenzo 63% of "macroeconomics" is wrong - lol.

  • GregLocock The predictable hysteria and repetition of talking points in the meeja is quite funny. it does not divide Oxford into six zones. it restricts access at 6 locations , one on each road, to reduce congestion in the town centre. Florence, which faces the same issue, traffic and narrow historic streets, lined with historic buildings, simply closed the entire town centre off. Don't see anybody whining about that.
  • Jeff S I have rented from Hertz before and never encountered this but if I had I would sue them. Would not want a gun pointed at me and thrown in jail for renting a car.
  • Arthur Dailey I did use a service pre COVID to get the pricing that the dealers were alleged to have paid the manufacturer. It also provided 'quotes' from multiple dealers .
  • Arthur Dailey Has anyone else concluded that we may have a new 'troll' on this site?
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