The Strategist

The EU to arrange negotiations on Trump tariffs with carmakers

07/05/2018 - 12:17

The EU authorities are planning to organize international negotiations with the world's largest automakers to develop a compromise plan that would help prevent introduction of strict import duties on cars and auto components in the United States by Donald Tramp. In the US, economists warn that imposing duties can hit the economy of those American states that once voted for Mr. Trump in the election.

Helgi Halldórsson
Helgi Halldórsson
Negotiations can be organized not only between European automakers, but also between companies from the United States, Japan and South Korea, the Financial Times (FT) said, citing unnamed diplomatic sources. It is reported that the main goal of the EU will be development of such a compromise solution between the companies that would avoid introduction of total tariffs of 25% for all auto imports to the US. At the same time, the EC hopes to relieve some of the US administration's tensions towards it. Perhaps, this will be achieved through concessions from international producers, for example, changes in tariffs for individual imports.

The European Commission did not comment on the publication, but noted that the head of the European Commission, Jean-Claude Juncker, will fly to Washington later this month, where he will meet with Donald Trump. Particulars of the visit have not been specified yet.

The representative of the European Commission stressed that "in the opinion of the EU, the possible introduction of US tariffs on cars will be contrary to the current rules of international trade and will have a negative effect on the economy not only of the EU and America, but of the entire world." "The EU will make every effort to avoid the introduction of such tariffs on the part of the United States," they assured.

Donald Trump's plans to introduce an additional 25% of duties the cars import have already caused a lot of negative reactions not only outside the US. At the end of last week, the Alliance of Automobile Manufacturers, unites US and foreign companies, said that introduction of the tariffs will lead to the fact that the retail price for cars sold in the US will grow by an average of $ 5.8 thousand. This would amount to an increase in the tax burden by $ 45 billion.

On July 3, the US Chamber of Commerce released a study stating that of the ten US states that are most affected by the introduction of tariffs for auto import, seven are those states that voted for Donald Trump in the presidential election - Louisiana, Texas, Alabama, Ohio , South Carolina, Michigan and Pennsylvania. According to the estimates of the Chamber of Commerce, the retaliatory measures after the imposition by Mr. Trump of duties on auto import could damage the economy of Pennsylvania by $ 1.7 billion, and South Carolina - by $ 3 billion.