The European Union is preparing a new list of American goods to be targeted with new tariffs if next week’s talks with President Trump fail to persuade him not to raise levies on imported cars.
The EU is planning to target American goods worth about 20 percent of the U.S. action, according to two unnamed officials who spoke to Bloomberg. The level of EU’s retaliatory measures would probably match the proposed U.S. ones, according to the same people.
“If the U.S. would impose these car tariffs that would be very unfortunate but we are preparing together with our member states a list of rebalancing measures as well,” EU trade chief Cecilia Malmstrom said on Thursday.
Jean-Claude Juncker, the Commission’s President, will meet with Trump on July 25, bringing two main negotiating proposals to the table: an offer to discuss the reduction of tariffs on cars and car parts among all major auto-exporting countries; and the possibility of raising a limited free-trade agreement.
Trump has threatened to impose a 20 percent tariff on imported cars, with Washington already applying duties on EU’s steel and aluminum exports.
The U.S. government has expressed its optimism about next week’s talks with the EU, with White House Economic Adviser Larry Kudlow saying that the commission president “is bringing a very important free-trade offer.”
The EU isn’t allowed under global rules to reduce its 10 percent tariff on American cars unless it either does so for all WTO members or reaches a bilateral accord with the U.S. that covers all aspects of their two-way trade.
“The aim of President Juncker’s visit is to try to establish a good relation, try to see how we can deescalate the situation and avoid it from going further and see if there is a forum where we can discuss these issues,” Malmstrom added.