'There is an obsession by the president on trade about cars': The French ambassador to the US says the auto sector is make-or-break for a possible trade war with Europe

  • Gerard Araud, French ambassador to the United States, told reporters he is concerned about the possibility of a trade war between the US and Europe over the auto sector.
  • The embassy has released a new study showing the benefits of trade cooperation between the United States and France.
  • “There is an obsession by the president on trade about cars,” Araud said. “Every time he’s talking about trade with the Europeans, he’s talking about BMW or Mercedes.”

An important engine of US economic growth is also a key sticking point in trade negotiations with Europe under the administration of Donald Trump: the auto sector.

Trump has made a war on free trade a lynchpin of his presidency, picking fights with everyone from key US allies like Canada and Mexico to more adversarial states like China.

Gerard Araud, France’s ambassador to Washington, believes the US and Europe would be better served working together to contain what he sees as unfair Chinese trade practices, rather than bickering with one another.

During his state visit in April, French President Emmanuel Macron “basically told President Trump, ‘we are facing a common problem with China, you’re right to raise the issue,'” Araud told reporters during a briefing at his official residence in Washington.

“It’s true that trade with China is not always fair, especially because of issues around intellectual property, but also the problem of access to markets and public procurement. So the idea was, Macron told Trump, you know, we should work together.

“The reaction of Trump was ‘No way, the European Union is worse than China‘” on trade.

US-EU trade worries reached fever pitch ahead of EU President Jean-Claude Juncker’s visit to the United States, but a last minute deal on specific sectors like natural gas and medical services helped avoid a full-on tit-for-tat trade war.

Still, a lot remains unresolved, in part because the US is juggling several negotiations at once, including the North American Free-Trade Agreement, which is crucial to the auto industry, as well as a new round of wide-ranging tariffs on Chinese goods.

“The cars will be certainly a sort of test case in the coming weeks and months on this European-American relationship – if the Americans go back to this idea of tariffs on cars or not,” Araud said. Any substantive talks “will take months to negotiate, and we are not sure that the president – your president – has the patience to wait for it.”

“So the coming months will be critical to whether we have a virtuous negotiation starting between the US and Europe and we forget the threats the tariffs and the trade war, or whether we go back to a trade war with the Europeans.”

The ambassador and his team were touting a new report called “France and the United States: A deep and mutually beneficial relationship.” As the title suggests, the analysis is an effort to show the benefits of the trade connections between the two countries as a way to counter US protectionist momentum in US politics, and the findings have been shared with relevant US senators and governors.

“This report is a protection maybe against protectionism,” said Renaud Lassus, the ambassador’s chief economic adviser. “This is a demonstration that, state by state, you see the connection between both sides of the Atlantic. And this is a demonstration that if tariffs or sanctions were to be applied on French companies this would be detrimental to a lot of US communities.”

The report finds that in 2017, “France was the largest source of job creation through foreign direct investment in the United States,” making French firms the third largest foreign employers in the country.

Still, ultimately, it’s Trump himself who needs to be convinced. And that seems like a tall order.

“There is an obsession by the president on trade about cars,” Araud said. “Every time he’s talking about trade with the Europeans, he’s talking about BMW or Mercedes.”

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