American Cars That Best Their European Counterparts
The European Union is prepared to hit 20 billion euros ($22.7 billion) of all U.S. products with tariffs if President Donald Trump follow through on a threat to impose duties on EU automobiles and auto parts, said a senior trade official for the bloc.

The assertion from Jean-Luc Demarty, director general for commerce in the European Commission, the EU’s executive arm, also highlights the possibility of a sudden escalation in trans-Atlantic industrial tensions.

“We shall continue to confront a U.S. administration that is content to threaten trade steps even against near partners and allies and, in general, to interrupt the status quo in pursuit of its goals,” Demarty told a European Parliament committee on Wednesday in Brussels. “We ought to stay calm.”

Last week, the commission introduced a blueprint to get a free-trade deal with the U.S. that could cut tariffs on a wide assortment of industrial products including cars.

The July 25 pact between Trump and commission President Jean-Claude Juncker put on hold the threat of U.S. tariffs on EU cars and automobile parts that would be based on precisely the same national-security grounds invoked for controversial American levies on foreign steel and aluminum.

U.S. tariffs on European automobiles and auto parts would indicate a considerable escalation of trans-Atlantic worries because the value of EU automotive exports to the American economy is about 10 times greater than the bloc’s aluminum and steel exports combined. As a result, European retaliatory duties would aim a larger volume of U.S. exports into Europe.

A 25 percent U.S. levy on foreign cars would include 10,000 euros into the sticker price of European vehicles imported to the nation, according to the commission.

“We should be prepared to respond appropriately and efficiently to any new trade restrictions the U.S. government may create for us,” Demarty explained. “We have prepared a draft listing of imports by the U.S. to the value of 20 billion euros where re-balancing action could be taken.”

He said the 28-nation EU ought to reject any strategy by the Trump administration for tariffs or quotas on European automotive products based on national-security motives. Last year, the bloc refused a U.S. requirement for caps on European alloy exports to the American marketplace.

“If the government issues a report in the upcoming few weeks suggesting import duties or quotas on European automobiles and car parts, we should be clear we aren’t interested in any managed trade solution and that we will respond if we are struck,” Demarty said.