EU’s Malmstrom Hopes U.S. Car-Duty Threat to Be Lifted Next Week

(Bloomberg) --

The European Union's trade chief said a U.S. threat to impose tariffs on EU automotive goods later this month persists while sounding a cautiously optimistic note that levies will be avoided.

European Trade Commissioner Cecilia Malmstrom repeated that the EU would retaliate with duties on a range of American products should the Trump administration hit imported cars and auto parts with tariffs based on national-security grounds. The U.S. faces a self-imposed deadline in mid-November for a decision.

“We do not know what the Americans -- or the American president -- will decide next week,” Malmstrom told a European Parliament committee on Wednesday in Brussels. “We do note that there seems to be very few people defending the idea of tariffs in the car sector.”

EU Targets $39 Billion in U.S. Goods in Case of Trump Car Duties

Last year, U.S. President Donald Trump infuriated Europe by declaring American imports of steel and aluminum a security threat and imposing levies of 25% and 10%, respectively, on shipments from around the world including the EU. That prompted the bloc to retaliate with a 25% tariff on 2.8 billion euros ($3.1 billion) of American goods such as Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey.

A 25% U.S. levy on foreign cars would add 10,000 euros to the sticker price of EU vehicles imported into the country, according to the Brussels-based European Commission, the bloc's executive arm.

Malmstrom said the EU has been in “intensive discussions” with the U.S. to prevent new tariffs affecting transatlantic trade in auto goods, asserting both sides would be hurt. “We continue, of course, to have contacts until the very last moment,” she said.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Richard Bravo, Zoe Schneeweiss

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