The European Union’s trade chief dismissed Donald Trump’s threat to impose tariffs on car imports, as the US president reiterated that the EU must eliminate barriers to its market for American goods, adding to signs that a widening trans-Atlantic rift could escalate into an all-out trade war.
“Secretary of Commerce Wilbur Ross will be speaking with representatives of the European Union about eliminating the large Tariffs and Barriers they use against the USA.,” Trump tweeted yesterday. “Not fair to our farmers and manufacturers.”
His comments came as EU Trade Commissioner Cecilia Malmstrom accused the Trump administration of using trade “to threaten and intimidate” Europeans. “But we are not afraid, we will stand up to the bullies,” Malmstrom said, adding that trade has been used “as a scapegoat.”
After announcing tariffs on steel and aluminium imports, Trump threatened over the weekend that he may now place higher levies on European cars, telling supporters at a rally that the countries of the EU have banded together “to screw the US on trade.” The latest spat comes as disputes over areas ranging from climate change to Middle East policy strain the bonds holding together the world’s closest political and military alliance.
The EU’s executive arm hinted that the escalating rhetoric and punitive tariffs could eventually lead to a trade war between the biggest economies on the planet, which would hurt both sides. “If anyone starts throwing stones, it’s better first make sure he’s not living in a glass house,” the European Commission said in a statement.
A meeting in Brussels between Malmstrom and her US counterpart Robert Lighthizer on Saturday ended without a breakthrough, as the EU didn’t receive assurances that it will be exempted from the metal tariffs. Malmstrom said yesterday that “she has read on Twitter” that Trump may offer clarifications on which countries may be spared.
The bloc says that it’s a close ally of the US and therefore any import levies on national security grounds are unjustified. While no further bilateral meetings are planned at the moment, contacts are ongoing as the EU is racing against time to secure an exemption before the aluminum and steel tariffs are enacted in less than two weeks.
Asked to respond to Trump’s accusations that the EU is imposing barriers to US automakers, Malmstrom said that “it’s hard to argue on Twitter over these issues, but the European Union is a very open market.” The bloc does impose a 10% levy on US car imports, while the US charges a 25% levy on trucks and pick-ups, and up to 40% on some clothes, she said.
On average, the EU applies a 3% tariff on US products, while the average tariff applied by the US is 2.4%, the European Commission says, adding that isolating cars is “cherry-picking.”