On Tuesday 26 June, European Trade Commissioner Cecilia Malmström warned against the risk for the whole global economy of an increase in customs duties on the imports of cars – which is promised by US President Donald Trump. She stated that the EU was ready to discuss tariff liberalisation on industrial products, including cars.
"A large number of countries, the OECD, the World Bank and the IMF have warned that such measures would harm the global economy, including the USA", Malmström said at a press conference.
Following the entry into force, on 22 June, of the EU's rebalancing measures in response to the raising of US customs duties on steel and aluminium products, Trump has threatened to hit US imports of EU cars with 20% duties.
At the end of May, the US administration started an investigation, under Section 232 of the 1962 Trade Expansion Act, into imports of vehicles, including lorries and spare parts, to determine the impact of these imports on US national security.
"This investigation will come to an end in the autumn. We have not prepared a list of measures to respond, but we will discuss instruments that we can use", Malmström said.
"Only 15% of US car exports are subject to (EU) customs duties because US cars manufactured with European parts – in other words, 85% – are not concerned. And European automobile manufacturers established in the US, which employ millions of people, would be affected (by the measures being considered by Washington)", she added.
"We have a slightly higher tariff on cars than the Americans – 10% compared with 2.5% – but they have higher duties on lorries, shoes and clothing. Generally, the tariffs between us are low, but there are tariff peaks", Malmström continued.
"We have suggested to the Americans that we negotiate a restricted agreement to dismantle customs duties on goods, including cars and spare parts, and in line with the rules of the WTO. We cannot remove these tariffs unilaterally, because the most favoured nation clause would oblige us to lift them for the rest of the world, and I do not believe the member states want that", she concluded. (Original version in French by Emmanuel Hagry)