EU threatens $23B in tariffs if Trump taxes cars

EU threatens $23B in tariffs if Trump taxes cars
© Getty Images

The European Union said Wednesday that it will retaliate with nearly $23 billion in tariffs if President TrumpDonald John TrumpPence: It's not a "foregone conclusion" that lawmakers impeach Trump FBI identifies Pensacola shooter as Saudi Royal Saudi Air Force second lieutenant Trump calls Warren 'Pocahontas,' knocks wealth tax MORE puts taxes on imported EU cars and auto parts.

Jean-Luc Demarty, director general for trade in the European Commission, told the European Parliament in Brussels that the bloc is prepared to hit back should Trump dissolve a July agreement to avoid new tariffs, according to Bloomberg.

“We should be ready to respond appropriately and effectively to any new trade restrictions that the U.S. administration may create for us,” Demarty said. “We have prepared a draft list of imports from the U.S. to the value of 20 billion euros [$22.7 billion] on which re-balancing action could be taken.”

ADVERTISEMENT

The 28-nation EU will reject any plan from the Trump administration that would implement tariffs or quotas on European automotive goods, Demarty said.

Trump has long threatened to slap 25 percent tariffs on foreign cars and auto parts, citing the national security concerns his administration raised to impose steep tariffs on imported steel and aluminum last year.

The EU retaliated to the steel and aluminum tariffs by taxing iconic U.S. goods such as Harley-Davidson motorcycles, Levi Strauss & Co. blue jeans and bourbon whiskey.

The president struck a deal with European Commission President Jean-Claude Juncker in July to step back from the threatened tariffs in an attempt to avoid a trade war. 

The EU commission unveiled a new free-trade deal proposal for the U.S. last week in an attempt to cut tariffs on a range of goods, including cars.

Bloomberg noted, however, that a U.S. probe of automotive imports will be completed in February.

“If the administration issues a report in the next few weeks proposing import duties or quotas on European cars and car parts, we should be clear that we are not interested in any managed trade solution and that we will react if we are hit,” Demarty told the European Parliament.

Demarty said that the international coalition will continue to challenge the Trump administration which is “content to threaten trade measures even against close allies and partners and, in general, to disrupt the status quo in pursuit of its goals.”