EU planning to sidestep US auto tariffs

The European Union is seeking to reach a deal with the United States to avoid falling victim to tariffs on US bound exports of cars and auto parts.

A pledge was made to pursue a deal at the assembly of EU commerce ministers in Innsbruck, Austria, who will be hoping to carry forward an agreement to delay possible US automotive duties reached between President Trump and European Commission President Jean-Claude Juncker in July.

Austrian economy minister Margarete Schramboeck said that Juncker and Trump’s meeting had showed "clear signals" that the two parties want to work together and that Europe needed to stand "united and strong".

Meetings between the US and EU have resulted in a joint working group being established in September, in particular seeking to reach a solution on US metal levies, which the EU responded to with its own duties on American goods.

EU auto exports to the US are 10 times greater in value than steel and aluminium exports combined, meaning that EU retaliation against any levies would have to be greater in size.

As such, the EU is keen to maintain or improve upon the current tariff ceasefire for fear that disputes could escalate into the sort of bitter tit-for-tat squabbling that Washington’s relationship with Beijing has descended into.

However, EU trade commissioner Cecilia Malmstrom said that any deal that would reduce potential import duties still laid a long way over the horizon.

"We are not negotiating anything with the US [...] The pre-work on a possible trade agreement on industrial goods hasn’t really started yet. We’ve been focusing now on the regulatory cooperation part," said Malmstrom.

Going forward, one of the primary issues for the EU is that of clarity as confusion still reigns, with officials not knowing whether Washington wants cars to be included in any deal aimed at lowering tariffs.

Trump had signaled a desire to impose 25% tariffs on imported EU pick-up trucks, despite its most imports of the vehicle coming from Asia and a Brussels-based commission reporting that no imports of the vehicle were currently being made.

When asked on Friday whether the EU had any more clarity on the issue of auto tariffs, Malmstrom said: "not really".