EU expects to avoid US tariffs on cars

12 November 2019 Ian Fletcher

(Excerpt)

The European Commission's outgoing president, Jean-Claude Juncker, has said that he does not expect that the US will apply tariffs on passenger cars imported from the European Union, reports Reuters. In an interview with Germany's Sueddeutsche Zeitung, Juncker said, "[US President Donald] Trump is going to make some criticism, but there won't be any auto tariffs." He added that "he [Trump] won't do it... You are speaking to a fully informed man."

Significance: Although nothing will be certain until President Trump makes a formal announcement, there is a growing feeling that tariffs will not be applied. Indeed, Trump was quoted last month as stating that the US government continues to talk with the EU about trade, but aims to avoid imposing broader tariffs for now, while US Treasury Secretary Steven Mnuchin has praised the increased investment made by European automakers in the country. Furthermore, even those that may have a vested interest in restricting the number of imports from Europe are keen for this not to happen, with the president of the American Automotive Policy Council, Matt Blunt, telling Reuters that the council remains "opposed to the imposition of Section 232 tariffs on automobiles or parts" as "it would be harmful to the economy and the auto industry". The decision on whether the US will apply the threatened national security (Section 232) tariffs, which could amount to up to 25% on vehicles and parts, will need to be taken by 14 November, after its having already been delayed by six months. However, among the alternative outcomes is a potential further six-month delay, while one European diplomat involved has told Reuters that, while discussions are heading in the right direction, there are concerns that President Trump could abruptly change his mind at the last minute.