Tariffs would damage US car industry, EU warns Trump
Image Daimler AG
(BRUSSELS) - Imposing tariffs on imports of EU cars would damage US trade and its own car industry, the European Union warned Monday in formal comments to the United States Department of Commerce.
The European Union made its formal submission in the framework of an on-going United States investigation on the 'impact on US national security' of imports of automobiles, including cars, SUVs, vans, light trucks and automotive parts.
The current US investigation 'lacks legitimacy, factual basis and violates international trade rules', the EU suggested, comparing it to a similar investigation that eventually led to the imposition of steel and aluminium tariffs earlier this year.
In its submission, which is available online, the EU reiterates firm opposition to a proliferation of measures taken on supposed national security grounds' for the purposes of economic protection.
This development, it says, 'harms trade, growth and jobs in the US and abroad, weakens the bonds with friends and allies, and shifts the attention away from the shared strategic challenges that genuinely threaten the market-based Western economic model'.
The EU and the US industry specialise in largely different market segments and over the last 5 years imports from the EU have been stable.
The EU makes clear that it sees no economic threat to the US automobile industry which it says is healthy, so imposing restrictive measures would in fact undermine current positive trends of the US automobile sector.
EU car companies which operate in the US export about 60 mper cent of their US production to other countries, which therefore contributes substantially to the US trade balance and provides 120,000 direct and 420,000 indirect jobs.
The EU warns that trade restrictions are likely to lead to higher input costs for US based producers, and this would translate in effect into a tax on American consumers.
The impact of potential new US tariffs on imported cars would be aggravated significantly by the likely countermeasures of US trading partners, as evidenced by the reaction to the US section 232 tariffs on steel and aluminium.
The EU has requested to participate in a public hearing to be held by the US Department of Commerce scheduled for 19 and 20 July.