By David Meyer
March 7, 2018

President Donald Trump’s threat to impose tariffs on European cars is based on a misconception about the imbalance in U.S.-EU trade, the EU’s trade chief has said.

Cecilia Malmström said Wednesday that, while it was true that “cars have a slightly higher tariff in the EU than the U.S., trucks for example have a much higher tariff in the U.S.”

Malmström, who suggested that the EU was preparing retaliatory tariffs on American agricultural products, also noted that European companies produce many cars in the U.S., providing jobs there and adding revenue to the American economy.

“On the car issue, [Trump’s perception] is not based on facts,” she said. “The truth is that [the industry] is creating a lot of American jobs.”

The trade commissioner said the EU was “eager” not to escalate a tit-for-tat imposition of tariffs, should Trump follow through with his threat to impose steel and aluminum tariffs on the outside world. However, she said, “we can also not just stay silent.”

Malmström said overcapacity was the cause of problems in the global steel industry, with “massive state subsidies” being to blame—a likely reference to China. Cheap exports to the U.S. are not a national security issue, as the Trump administration alleges, she added.

She said that Europe was preparing measures to deal with a “surge of steel and aluminum imports into the EU following U.S. tariffs,” but the bloc was keen to avoid closing off its markets “as much as possible.”

The EU’s commissioners met this morning to discuss their response to the threatened tariffs. One thing to come out of that meeting was a list of U.S. products that could be hit with tariffs in the EU, if Trump goes ahead with his plan.

Malmström did not detail the list in full, but noted that it includes peanut butter, bourbon, cranberries and orange juice.

“A trade war has no winners and if it doesn’t happen, the better we can work with the Americans and our other allies on the core problem, which is overcapacity,” she said.


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