- Cecilia Malmstrom, the top trade official for the European Union, was in the US on Wednesday.
- Malmstrom told reporters that the EU has prepared a response in the event that President Donald Trump goes forward with auto tariffs.
- Malmstrom also warned that tariffs on cars and trucks would be devastating for the EU and the US.
Cecilia Malmstrom, the top trade official for the European Union, warned Wednesday that the bloc is ready strike back at the US in the event that President Donald Trump imposes tariffs on cars and truck imported into the US.
After a meeting with US Trade Representative Robert Lighthizer, Malmstrom told reporters that the EU would slap tariffs of equal size and strength on US goods if Trump went through with his auto tariff threat.
“It would be a rebalancing list covering a lot of different sectors,” Malmstrom said. “That would be ready if we thought those measures would hit us. We hope not.”
Trump has threatened to impose a 25% tariff on all cars, trucks, and auto parts coming into the US. The warning was enough to prompt European Commission President Jean Claude Juncker to agree to a preliminary deal with the US to expand trade between the two countries and avoid the tariffs.
But lack of progress on a final deal has Trump reportedly eager again to impose auto tariffs. Free trade advocates in the Trump administration dissuaded the president from imposing the tariffs during a meeting on Tuesday, according to multiple reports, but the possibility remains of auto tariffs some time in the future.
Any auto tariffs would be particularly damaging for the EU given how many cars come from the continent to the US every year. According to the European Automobile Manufacturers Association, the EU shipped over to $US40 billion worth of cars to the US in 2017. Additionally 2.9 million cars were produced in the US by European automakers in 2017, according to the group.
But the pain would not be more widespread, as the EU trade chief said.
“These tariffs would be damaging, not only for the European economy but for the US economy,” Malmstrom said.
According to a study by the Peterson Institute for International Economics, a 25% tariffs on autos would result in the loss of 195,000 American jobs over a one-to-three-year period.
Malmstrom also told reporters that discussions on a possible free trade deal between the US and EU were progressing, but there were still a large number of issues to work out. The EU official also expressed concern about the still-present tariffs on steel and aluminium coming into the US.
“We have already suffered from the tariffs on steel and aluminium,” she said.