Update: We wish Malmstrom well but suspect, given President Trump’s most recent tweet, that she will receive anything but a warm welcome…
I told you so! The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google. They truly have taken advantage of the U.S., but not for long!
— Donald J. Trump (@realDonaldTrump) July 19, 2018
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European Union Trade Commissioner Cecilia Malmstrom will travel to Washington later this month alongside European Commission President Jean-Claude Juncker to try and hash out a new trade agreement with the Trump administration and ease the transatlantic trade dispute. But just in case the talks fall apart and the US moves ahead with Section 301 tariffs on European cars – President Trump has threatened a 20% tariff) – Malmstrom said the EU is preparing a list of US imports to hit with tariffs in response, per Reuters.
The retaliatory “rebalancing” would target the US car sector, which she said is “healthy” and that no one involved in the sector had called for tariffs.
“We are preparing together with our member states a list of rebalancing measures there as well. And this we have made that clear to our American partners,” Malmstrom told a conference hosted by the German Marshall Fund of the United States in Brussels.
Those tariffs would be in addition to the 2.8 billion euros ($3.25 billion) worth of US products ranging from whiskey to motorcycles that were designed to hit “distinctly American” products manufactured in states that supported Trump during the election.
According to Reuters, EU steel and aluminum exports to the US that are subject to tariffs are worth some 6.4 billion euros ($7.4 billion) per year. By comparison, EU car and car-part exports are worth 51 billion euros ($60 billion). The Commission on Wednesday briefed representatives from member states on the retaliations that are being considered, though one diplomat said the briefing didn’t include a list of US products that would be subject to the tariffs, saying only that they would total roughly 9 billion euros.
White House economic advisor Larry Kudlow said yesterday that he expects Juncker to arrive with an offer in hand for a bilateral trade deal that would lower tariffs on auto imports. Malmstrom pushed back on this idea, saying that a deal to eliminate import duties on cars could only be part of a much broader agreement. But it appears the Europeans, already sufficiently shaken by Trump’s aggressive rhetoric on trade (not to mention his demands that NATO members meet their funding commitments), might be looking for an end to these transatlantic tensions. And the US, which has reportedly failed to pursue talks with China, is also looking for a clear win on trade.
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Author: Tyler Durden