Trump Promises a ‘25% Tax on Every Car From the EU’ As His Administration Tries to Negotiate

August 22, 2018, 9:52 AM UTC

Will the Trump administration impose hefty tariffs on European cars or not? The question remains unanswered after two seemingly contradictory episodes on Tuesday.

First, Commerce Secretary Wilbur Ross told The Wall Street Journal that his department’s report on the potential tariffs may not come out this month, as he had previously said was likely.

The delay, Ross said, was “in view of the negotiations” going on between the U.S. and the European Union, and with fellow NAFTA signatories Mexico and Canada. That provided a glimmer of hope for the car industry, which is desperate to ward off the tariffs.

However, hours later, President Donald Trump took to the stage at a West Virginia campaign rally and declared: “We’re going to put a 25% tax on every car that comes into the United States from the European Union.”

That statement could be seen as Trump playing bad cop to his negotiators’ good cops, but it could also undermine the U.S.’s negotiating stance, if the European Commission sees the tariffs as a foregone conclusion.

Trump tasked Ross with evaluating whether auto imports can be classed as a national security threat—the same justification he used for the steel and aluminum tariffs that hit earlier this year.

Some within the car industry have warned that tariffs on imports would lead to dramatic price increases for consumers and perhaps even a “collapse in the automotive market.”

Apart from the negotiations issue, Ross told the Journal that American and overseas car manufacturers had sent so much material to him, to support their stance, that it was difficult to produce the report within the planned timescale.

“We just received elaborate questionnaires from the car companies, with zillions of pages, and that won’t be ready in five minutes,” Ross said.