EU warns Trump: auto tariffs could lead to $300B retaliation

BRUSSELS — The European Union on Monday slammed the Trump administration for considering tariffs on auto imports, saying they could lead to global retaliation against some $300 billion in U.S. goods amid signs of a brewing trade war.

European Commission spokesman Margaritis Schinas said the U.S. investigation into the possibility of auto tariffs “lacks legitimacy, factual basis and violates international trade rules,” just like last month’s U.S. tariffs on steel and aluminum imports.

The EU sent comments to the U.S. for consideration in the Department of Commerce investigation into whether auto imports pose enough of a threat to U.S. national security to justify tariffs and estimating the economic impact.

President Donald Trump cited national security concerns for the previous tariffs. The EU, which described the move as “pure protectionism,” introduced duties on U.S. products in return, as did Mexico, Canada, Turkey and India.

“European cars do not threaten or impair the health of the U.S. industry and economy,” Schinas said. He noted that European carmakers create over half a million jobs in the U.S.

In its submission, the EU argues that trade restrictions would likely to lead to higher costs for U.S.-based producers, and in effect become a tax on American consumers. This would only be aggravated by the likely counter-measures the 28-nation bloc and other trading partners might take.

The EU responded to the steel and aluminum tariffs with “rebalancing measures” that hit around 2.8 billion euros ($3.25 billion) worth of American-made products.

The EU said the U.S. auto industry is in good health, but any restrictive duties could undermine that trend.

The impact of retaliatory measures by Washington’s trading partners could total around $294 billion — or around 19 per cent of total U.S. exports in 2017, the EU estimates.

Last week, European Council President Donald Tusk warned that Trump’s policies are harming trans-Atlantic relations and that “we must be ready to prepare our Union for worst-case scenarios.”

Tusk thinks Trump’s action on tariffs, pulling out of the global climate agreement and withdrawing from the Iran nuclear deal — an agreement the Europeans say is vital to their security — is part of a pattern rather than isolated incidents. Any tariffs on EU cars would hit Germany hard.

EU Trade Commissioner Cecilia Malmstrom said that while the EU does have higher tariffs on cars than the U.S. — around 10 per cent versus 2 per cent — the tariffs only apply to a fraction of the car market, around 15 per cent. The U.S. has higher tariffs on trucks and other products, she said.

Malmstrom said the EU cannot lift its car tariffs for the United States or it would have to do so for the rest of the world, and “there’s no way” EU member countries would agree to that.

Despite questioning the probe’s legitimacy, the EU has requested to take part in a Commerce public hearing on July 19-20.

Lorne Cook, The Associated Press

Just Posted

Diesel spilled in Penhold neighbourhood

Penhold Fire Department responded

Rebels drop home opener to Oil Kings

The Edmonton Oil Kings were simply better than the Red Deer Rebels… Continue reading

House fire in Penhold

Damage estimated at $30,000

Red Deer Players host play reading for public

Audience feedback for playwright

Sylvan Lake cleanup cancelled

Weather prompts cancellation

RDC Kings topple Medicine Hat College Rattlers

Kings Matheus Alves scores twice in the win

Emotional weekend in Texas, Detroit

It was a weekend to honour a couple of baseball’s distinguished sluggers.… Continue reading

Nurse leads Canada over South Korea 82-63 at FIBA Women’s World Cup

TENERIFE, Spain — Kia Nurse poured in 29 points to lift Canada… Continue reading

Aretha Franklin exhibit debuts with eye toward her legacy

DETROIT — The Detroit museum that hosted Aretha Franklin’s public visitations after… Continue reading

‘Anaana’s Tent’ passes Inuit songs, legends, language to a new generation

In Pangnirtung, Nunavut, on the eastern tip of Baffin Island, Rita Claire… Continue reading

Housing data decision opens door to real estate innovation, say realtors

TORONTO — Realtor Daniel Steinfeld has wanted to post home sales data… Continue reading

Ty Long kicks winning field goal, Lions come back to beat Ticats in OT

VANCOUVER — Ty Long was eager for a special moment, and he… Continue reading

Indigenous eateries take centre stage in Canada thanks to increasing awareness

VANCOUVER — Since Paul Natrall started serving Indigenous cuisine from his Mr.… Continue reading

Canada’s capital region reeling after intense tornado rips through communities

OTTAWA — Parts of Canada’s national capital were still reeling Saturday after… Continue reading

Most Read