Back to Normal: U.S. Auto Tariff Threats Return for EU

On Wednesday, President Donald Trump threatened to impose fresh tariffs on European automotive imports if the region can’t work out a trade deal with the United States. The good news is that the U.S. is already in the opening stages of negotiation with the United Kingdom, which is due to leave the EU at the end of January. British Prime Minister Boris Johnson has even said a key benefit of Brexit is the ability to negotiate with countries like the U.S. independently.

Unfortunately, the rest of Europe doesn’t seem as eager to do business — encouraging Trump to fall back to tariff threats. But there’s clearly a retaliatory angle here. In 2018, the EU threatened punitive tariffs on traditionally American items like whiskey and motorcycles as a response to Trump’s intent to impose tariffs on steel and aluminum. He’s targeting French goods this time, mentioning 100-percent fees on imported luxury goods from France (champagne, handbags, etc.), additional levies on digital services, and a 25 percent duty on European cars.

“Ultimately it will be very easy because if we can’t make a deal, we’ll have to put 25 percent tariffs on their cars,” Trump told Fox Business‘ Maria Bartiromo this week.

Mike Manley, Fiat Chrysler CEO and current head of the European automotive lobby group ACEA, was quoted by Reuters as saying Trump ought not to be taken lightly.

“If you look at President Trump’s track record I think he is incredibly serious. If the parties involved approach those discussions in a serious manner it will be possible for an amicable conclusion to be reached,” Manley said at an industry event in Brussels. “An escalation of the tariffs is not to the benefit of anyone.”

Trump said he met with World Trade Organization Director-General Roberto Azevêdo to discuss the president’s frustrations with the organization during the World Economic Forum in Switzerland. “Roberto and I have a tremendous relationship, and we’re going to do something that I think will be very dramatic,” he said.

Azevêdo also spoke at the event, suggesting that the WTO should probably undergo some kind of reformation and noting that he’s already planning meetings in Washington to discuss the matter further.

As for a deal with Europe, the president said he has a deadline in mind but didn’t want to make it public until he was sure. However, he warned that it was “a fairly quick date,” adding that the U.S. had no interest in delaying an agreement.

“I met with the new head of the European Commission, who’s terrific. And I had a great talk. But I said, ‘look, if we don’t get something, I’m going to have to take action’ and the action will be very high tariffs on their cars and on other things that come into our country,” Trump told CNBC, adding that investors shouldn’t panic because the EU “has to make a deal.”

He closed his time at the World Economic Forum by commenting on teenage climate activist Greta Thunberg, who also spoke at the event. Trump recommended the public “reject the perennial prophets of doom and their predictions of the apocalypse … I think that some people, they’ve put it at a level that’s unrealistic, to the point that you can’t live your life.”

[Image: Joseph Sohm/Shutterstock]