EU’s Cecilia Malmstrom believes US auto tariffs will not come into effect

European Trade Commissioner Cecilia Malmstrom shared her belief yesterday, on January 24, that the United States would not impose import tariffs on European cars. She also said that even if the US did impose the tariffs, the European Union was ready with its response.

The US President Donald Trump had threatened to impose tariffs on cars from around the world, as he did with aluminium and steel last March. In July, however, the European Commission President Jean-Claude Juncker had negotiated a ‘ceasefire agreement’ with the US.

Cecilia Malmstrom, while speaking at a panel event at the World Economic Forum in Davos, pointed out that the Trump-Juncker agreement tried to find common ground. The agreement delayed the tariffs while trade talks took place.

"We're advancing, we have made some very important progress there and there's a process that is positive, I think, and it said also that we would not impose tariffs on each other," she said while adding, "If that is violated by the US, we will have to respond. I don't want to do that. But we will have to do that. But we are confident that we will not be taxed on this."

Both the European and US car industries have made perfectly clear that they do not want to see a 25 per cent tariff imposed on cars as it would badly affect both the countries’ economies.

The legal form of the "Section 232" tariffs invoked by Trump would imply that the EU was a national security threat to the US, she said.

"We can never accept that. We are friends and allies and we are not a national security threat. So we hope that this will not happen," she told at the Davos gathering.