US President Donald Trump rejected an EU offer to scrap tariffs on cars, likening the union’s trade policies to those of China.
“It’s not good enough,” Trump said of the offer from Brussels during an Oval Office interview with Bloomberg News on Thursday. “Their consumer habits are to buy their cars, not to buy our cars.”
Trump’s comments come just hours after European Commissioner for Trade Cecilia Malmstrom told European Parliament lawmakers that the EU would be “willing to bring down even our car tariffs to zero, all tariffs to zero, if the US does the same.”
Autos were previously excluded from the discussions that focused on manufactured products bought and sold between the two markets.
Trump compared the EU to China, where the president is engaged in another escalating trade war.
“The European Union is almost as bad as China, just smaller,” Trump said.
In July, the US and EU agreed not to impose new tariffs on each other, after Trump and European Commission President Jean-Claude Juncker met at the White House. The two sides agreed to open discussions about a trade agreement on industrial goods, but at US insistence left out cars.
Trump has set achieving zero tariffs, zero subsidies and zero non-tariff barriers for industrial goods as part of the talks.
European leaders and the continent’s auto industry have been offering to drop the EU’s 10 percent tariff on passenger vehicles, a persistent target of Trump’s complaints. He has used the gap between that EU duty and the US’ own 2.5 percent tariff on passenger cars to justify his plan to impose an import tax of as much as 25 percent on imported cars and parts.
Eliminating tariffs on US auto imports would do little for General Motors Co and Ford Motor Co, but would lend a major boost to Germany’s BMW AG and Daimler AG. SUVs assembled by the German carmakers in the American South dominate the models exported to Europe from the US.
Trump has ordered the US Department of Commerce to investigate whether car imports imperil national security, under the same provision he invoked to impose global tariffs on steel and aluminum earlier this year.
The findings of the auto study are due by February next year, although Trump could decide to act before then.
This week, Trump threatened Canada with auto tariffs if the country failed to join his trade deal with Mexico to replace the North American Free Trade Agreement.
In response, Juncker said he hoped that the July “ceasefire agreement” with Trump to refrain from imposing car tariffs would prevail, but the EU would impose its own tariffs if the US changed course.
Juncker yesterday told German broadcaster ZDF that the EU would not let anyone determine its trade policies, adding that if Washington violated the deal and imposed auto tariffs, “we will also do that.”
In the interview, Trump also said that China would not outlast the US in their trade dispute and his administration is re-examining how to determine whether countries are manipulating their currencies.
“We are a much stronger country,” Trump said. “Nobody’s waiting us out. Our country is stronger than it’s ever been financially.”
Asked to confirm speculation that the White House wants to move ahead with a plan to impose tariffs on US$200 billion in Chinese imports as soon as a public-comment period concludes next week, Trump smiled and said it was “not totally wrong.”
Additional reporting by Reuters
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