E.U. would strike back at U.S. car tariffs, trade chief warns

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The European Union would take reprisals against any US decision to set tariffs for car imports, although the bloc hopes it can prevent such a confrontation, according to European Trade Commissioner Cecilia Malmstrom.

"These tariffs would be detrimental, not only for the European economy, but also for the US economy," Malmstrom said in Washington on Wednesday after meeting with US sales representative Robert Lighthizer.

The EU would file a complaint with the World Trade Organization and reduce retaliation rights for US products if President Donald Trump imposed barriers against European cars, she told reporters. EU rates would be a "rearranging list covering a large number of different sectors," she said, refusing to identify specific American goods that they needed to target. "That would be ready if we thought that these measures would affect us, we hope not."

The US and the EU are trying to maintain a fragile trade record after relations have come under pressure from Trumps' America First & # 39; foreign policy approach. Trump has threatened to impose tariffs on foreign cars and this year instructed the Ministry of Commerce to investigate whether imports threaten national security.

Trump met his top retail advisors at the White House on Tuesday to discuss a concept of research in commerce. Government officials decided that they were not ready to go to the rates now, according to two people familiar with the case.

Abolishing tasks

After the US had imposed import duties on steel and aluminum earlier this year, the EU responded with rates for iconic US products, including bourbon and motorcycles. In July, the US and the EU agreed not to impose new tariffs on each other because they are working on the complete abolition of tasks. Malmstrom said on Wednesday that she was making progress in discussing trade with Lighthizer, adding that nothing was decisive to announce.

"The conversations will continue, of course," she said.

Malmstrom said Tuesday that there is enough common ground for a limited trade agreement with the US on industrial goods that exclude vehicles, agriculture and liquefied natural gas. Moreover, strengthening the regulatory cooperation would probably be left out of a first agreement, she said at an event in Washington.

She reiterated on Wednesday that she expects the EU to be exempted from new US car fares. But Trump and his assistants have shown signs of impatience about the EU and the pace of the talks in recent weeks. US trade secretary Wilbur Ross grumbled last month after a meeting in Brussels that the clock was ticking and that the EU had to prove that things were progressing.

The relationship has also not been helped by a turnaround in the once so pleasant relationship between Trump and Emmanuel Macron. Trump recently reacted angrily to the French President's call for the establishment of a European army.

Both parties still need formal mandates to start negotiations. The US is technically not allowed to conduct formal discussions before January according to the convention rules applicable to trade agreements. EU negotiators must meanwhile get the green light from the 28 member states of the block.