EU Ready for Trade War: Protecting Europe’s Car Exports to the US

Written by | Tuesday, July 3rd, 2018

The EU is ready to wage a trade war on the United States if President Trump decides to impose tariffs also on European cars. Washington is still investigating whether the imports of automobiles and automotive parts are a threat to national security. Brussels has responded in a written form earlier this week saying that the current investigation was lacking legitimacy, factual basis and it also violates international trade rules. “The EU reiterates its firm opposition to the proliferation of measures taken on supposed national security grounds for the purposes of economic protection,” the Commission added.

The EU had earlier introduced counter-measures aimed at €2.8 billion ($3.3 billion) of American imports following the US decision to impose tariffs on European aluminum and steel. The Commission estimates that as much as $294 billion of US exports could be subject to countermeasures in case of restrictions on European automobiles. The EU executive reiterated that if the US investigation leads to restrictions on European cars imports, it is ready to respond but warned that “trade restrictive measures would be contrary to international trade rules”.

The Commission also stressed that “there is no economic threat to the US automobile industry which is healthy, having steadily expanded domestic production in the last 10 years.” Automobile imports from the EU “do not threaten or impair the health of the US industry and economy”, added the EU executive. The imposition of restrictive measures, however, would undermine that growth. The EU estimates the impact on US GDP could go by up to $13-14 billion.

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