Trump Won't Hit EU With Threatened Car Tariffs, Juncker Says

Birgit Jennen and Jonathan Stearns

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U.S. President Donald Trump will not impose tariffs on European Union automotive goods next week as threatened, European Commission President Jean-Claude Juncker told German newspaper Suddeutsche Zeitung.

“Trump will ruffle a bit, but there will not be any automobile tariffs,” Juncker said in the interview, which was published online Thursday. “He won’t do it. You’re talking to a fully informed man.”

Trump gave himself a deadline of mid-November to decide whether to impose the levies on cars and auto parts. The EU threatened to retaliate with tariffs on $39 billion of American goods if the president carried out his threat.

Juncker’s comments echo those by U.S. Commerce Secretary Wilbur Ross last week, when he said Trump may not need to impose auto tariffs after holding “good conversations” with automakers in the EU.

“Our hope is that the negotiations we’ve been having with individual companies about their capital investment plans will bear enough fruit that it may not be necessary to put the 232 fully into effect, may not even be necessary to put it partly in effect,” Ross told Bloomberg Television on Sunday, referring to the investigation under Section 232 of a 1962 trade law.

Last year, Trump infuriated European leaders by declaring American imports of steel and aluminum a security threat and imposing levies of 25% and 10%, respectively, on shipments from around the world, including the EU. That prompted the bloc to retaliate with a 25% tariff on 2.8 billion euros ($3.1 billion) of American goods such as Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey.

Transatlantic Tensions

A 25% U.S. levy on foreign cars would add 10,000 euros to the sticker price of EU vehicles imported into the country, according to the Brussels-based European Commission, the bloc’s executive arm.

U.S. tariffs on European cars and auto parts would mark a significant escalation of transatlantic tensions because the value of EU automotive exports to the American market is about 10 times greater than that of the bloc’s steel and aluminum exports combined. As a result, European retaliatory duties would target a bigger amount of U.S. exports to Europe.

Mina Andreeva, Juncker’s spokeswoman, declined on Thursday evening to be specific about how he knew what Trump’s decision would be.

“The president and his team are in constant contact with our U.S. counterparts -- as it should be,” Andreeva said in a message sent by phone.

On Wednesday evening, EU Trade Commissioner Cecilia Malmstrom said the threat of U.S. tariffs on European automotive goods persisted while sounding a cautiously optimistic note such levies will be avoided.

“We do not know what the Americans -- or the American president -- will decide next week,” Malmstrom told a European Parliament committee in Brussels. “We do note that there seems to be very few people defending the idea of tariffs in the car sector.”

(Updates with Wilbur Ross background in the fourth paragraph.)

To contact the reporters on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net;Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Richard Bravo, Tim Ross

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