Friday 24 January 2020

EU chief warns US it faces €20bn in tariffs

US President Donald Trump was set to meet EU chiefs. Photo: Reuters
US President Donald Trump was set to meet EU chiefs. Photo: Reuters

Johan Ahlander and Paul Carrel

The European Commission is drawing up a list of $20bn of US goods to hit with duties if Washington imposes tariffs on imported cars, European Union Trade Commissioner Cecilia Malmstrom has said on the eve of her boss's meeting with US President Donald Trump.

Ms Malmstrom is in Washington for talks on trade, with European Commission President Jean-Claude Juncker who was due to meet Mr Trump in a bid to stop the United States from extending its import tariffs on EU steel and aluminium to cars and car parts.

"We hope that it doesn't come to that and that we can find a solution.

"If not, the EU Commission is preparing a rather long list of many American goods. It would be around $20bn," Ms Malmstrom told Swedish newspaper 'Dagens Nyheter'.

In response to the US metals tariffs, the EU has already imposed its own import duties on €2.8bn worth of US goods, including products like bourbon and motorcycles that are made in some of the electoral districts that supported Trump.

Ms Malmstrom said the next potential round of EU tariffs would not target specific US states.

"No, now it's more general goods such as agricultural products, machinery, high-tech products and other things," she said.

The Commission briefed EU countries last week on the bloc's possible response, saying in theory it could hit €9bn of US goods, according to EU sources.

However, some EU diplomats said the Commission was also looking at going for double that amount - to the level Ms Malmstrom is suggesting - at half the duty rate.

A formal proposal would only come after the US Commerce Department completes its investigation into whether car imports threaten national security.

The report's deadline is February 2019, but it is now expected by late August/early September.

The European Commission, which handles trade policy on behalf of the EU's 28 members, has insisted that Mr Juncker is seeking to open a dialogue with Mr Trump, rather than to negotiate.

EU officials have also downplayed the idea that Mr Juncker is arriving with a novel trade offer.

EU Budget Commissioner Guenther Oettinger suggested the EU would be ready to discuss mutual tariff cuts provided the Washington lifts punitive metals tariffs first. (Reuters)

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