The European Commission has warned the United States that imposing tariffs on European cars “will be harmful first and foremost for the US economy.”
The Commission’s warning was part of a response — seen by POLITICO Brussels Playbook — to a U.S. request for comment on the issue. The response was dated last Friday and sent to the U.S. Commerce Department’s Bureau of Industry and Security.
The 11-page document states that the EU’s internal analysis “shows that an additional import tariff of 25 percent, applied to automobiles and automotive parts, would in first instance have a negative impact on US GDP in the order of 13-14 billion USD, and the current account balance of the US would be not affected positively.”
U.S. President Donald Trump recently threatened to hit imports of European cars with a 20 percent tariff if Brussels doesn’t remove tariffs and other trade barriers in an escalating row.
European carmakers produced 2.9 million vehicles, or 26 percent of American car production, in the U.S. last year, according to the document. Even without Chrysler — which is, as the Commission notes, “one of the traditional US ‘big three’ manufacturers” but is now of “European ownership” — production by EU-owned companies in the U.S. “still amounts to 16 percent of national production and 1.8 million vehicles.”