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Trump administration eyeing alternatives to EU auto tariffs

By Francis Jay

Commerce secretary says Washington is open to a negotiated settlement before tariff deadline next month

US commerce secretary Wilbur Ross believes a negotiated alternative to tariffs on imported EU car parts may still be possible.

The Trump administration has vowed to slap penalties on auto components imported from the EU from November onwards. Washington’s insistence that EU automotive imports pose a threat to national security has heightened transatlantic tensions and spooked global markets.

But in an interview with the Financial Times newsletter Ross struck a more conciliatory tone.

“One [option] would be to say, ‘I’m just not going to do anything’, the second would be to impose tariffs on some or all [countries]...  the third might be some other form of negotiation,” he said.

The tariffs were originally due to come into force in May before President Trump, under pressure from his own officials, offered a six-month reprieve. Ross’s words may indicate concern in Washington at the economic and political consequences of a protracted trade war with the EU in the run up to the Presidential election in November 2020.

Such fears did not stop the US imposing $7.5 billion (£5.8bn, E6.75bn) of tariffs on a range of EU goods earlier this month, including French wine, Italian cheese and Scotch whisky. But tariffs on auto parts would represent a significant ratcheting up of transatlantic tensions. EU ministers have called for a negotiated settlement to the dispute.

Ross was speaking before the Apec summit in Chile next month, where he believes the chances of a limited truce in the ongoing trade war with China are “far better than 50:50.”

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