EU ready to discuss lower auto tariffs with US, says bloc's trade chief

By Jorge Valero and Enda Curran

 

The European Union is ready to discuss cutting tariffs on autos and other goods as it seeks to head off a trade war with the US, the bloc’s top trade official said Wednesday in Washington.

 

“Lowering the tariffs, even eliminating the tariffs let’s say for industrial products, this is something which we are ready to discuss,” Maros Sefcovic — the EU commissioner for trade — told an audience at the American Enterprise Institute. “Including ready to look at the tariffs for the cars.”

 

Sefcovic is in Washington for talks with President Donald Trump’s trade team, and will meet later Wednesday with Commerce Secretary Howard Lutnick as well as trade representative designate Jamieson Greer and Kevin Hassett, the president’s top economic advisor.  

The EU commissioner said the bloc will do its “utmost” to avoid an escalatory tariff clash. If the US acts in line with Trump’s threats, “we will have no choice but to respond firmly and swiftly,” he said. “But we do hope to avoid this scenario, meaning the unnecessary pain of measures and countermeasures.”

 

Trump says he’ll impose 25 per cent tariffs on steel and aluminum from March 12. He’s also vowing a raft of other charges, including reciprocal tariffs based on policies of partners that are seen as obstacles to US trade. Trump has cited the EU’s value-added tax as the kind of measure he’s looking to respond to.

 

Trump also floated higher auto levies, particularly eyeing the Europeans. He’s demanded that the EU lower tariffs for American cars, which are currently at 10 per cent, compared with a 2.5 per cent tariff level in the US. But any such move would force the bloc to lower duties for all World Trade Organization members, unless the reduction is part of a formal trade agreement.

 

The European Commission, the EU’s executive arm, said on Tuesday it hasn’t made any specific offer yet to reduce tariffs on imported US cars. “Any tariff reductions must be mutually beneficial and negotiated within a fair and rules-based framework,” the commission said. 

 

Big Tech 

Sefcovic also said Wednesday that the EU is ready for discussions with the US over “big tech,” adding that the bloc’s regulations are aimed at protecting small firms against the largest ones, rather than targeting Americans. 

 

EU rules “really do not have a discriminatory nature, they are not aimed at US big tech,” he said. Trump administration officials have complained that US tech companies get unfair treatment in Europe.   

 

As a carrot in trade talks, the EU has suggested it could buy more liquefied natural gas and weapons from the US. But if negotiations fail, the bloc has been preparing to retaliate quickly and proportionally to any US tariffs. 

 

German Economy Minister Robert Habeck, in an interview with public broadcaster ARD, signaled that Europe could re-apply the kind of duties it imposed on the US during Trump’s first term, when he slapped tariffs on nearly $7 billion of European steel and aluminum exports. 

 

Back then, the EU replied by targeting politically sensitive companies, including Harley-Davidson Inc. motorcycles and Levi Strauss & Co. jeans. The sides reached a truce in 2021, when the US introduced a tariff-rate quota system while the EU froze all of its restrictive measures.

 

Habeck referenced those actions when asked what an EU response to new Trump tariffs could look like. “They actually hit the economy, especially the Trump-supporting states, hard,” he said. “Europe has counter-measures up its sleeve.” 

 

Still, entering a tit-for-tat tariff battle with the US would not only pose risks for the European economy but also for the EU’s political stability, at a delicate moment when Trump’s diplomacy with Russia has sent shockwaves through the bloc.