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The new Director General of Trade for the European Commission
has warned that the United States would face retaliation if it
applies further tariffs on cars and other goods. Sabine Weyand was
quoted by Reuters as telling a Center for Strategic and
International Studies event, "It is natural that friends sometimes
disagree with each other, but this is something else. There are
real threats elsewhere, yet we find ourselves in a morale-sucking,
growth-slowing series of skirmishes. We have to overcome this." She
said, "We will not negotiate under WTO [World Trade Organization]
illegal action. Nor will we go down the road of managed trade."
Weyand said that should the further tariffs that have been
threatened are applied, it would be a "lose-lose" situation for all
involved.
Significance: Negotiators for Europe and the US
have been meeting since a truce was reached between European
Commission President Jean-Claude Juncker and US President Donald
Trump around a year ago, and it appears that some progress is being
made. According to Weyand, this includes setting standards and
conformity assessments for trade, and on liquefied natural gas
(LNG) shipments. However, little progress has been made on bigger
issues related to industrial tariffs. This includes the threat by
the US to apply a 25% tariff on passenger cars imported from the
European Union (EU) and is one of the levers being used by
President Trump to bring about talks in the first place. The US has
also warned that tariffs could be applied during discussions if
progress takes place too slowly. the EU has unveiled its plans for
a wider free-trade deal with the US that would cut tariffs on a
wide range of industrial goods including passenger cars. However,
it continues to block agricultural products, which the US has been
pushing to include. Even so, President Trump has yet to act on the
recent Section 232 investigation.
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