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| As Trump Threatens Car Tariffs, Europe Prepares to Strike Back | As Trump Threatens Car Tariffs, Europe Prepares to Strike Back |
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| WASHINGTON — Europe’s top trade diplomat is bracing for a trade war with the United States and said on Wednesday that the European Union was preparing to strike back if President Trump followed through with his threat to impose tariffs on Europe’s cars. | WASHINGTON — Europe’s top trade diplomat is bracing for a trade war with the United States and said on Wednesday that the European Union was preparing to strike back if President Trump followed through with his threat to impose tariffs on Europe’s cars. |
| The European Union and the United States are meeting this week to try to lay the foundation for trade talks that would reduce tariffs on a range of industrial goods. But as Mr. Trump and members of his administration vent about the pace of negotiations and continue dangling potential auto tariffs, the Europeans have begun drawing up a list of American products they would tax if the trade dispute escalates. | The European Union and the United States are meeting this week to try to lay the foundation for trade talks that would reduce tariffs on a range of industrial goods. But as Mr. Trump and members of his administration vent about the pace of negotiations and continue dangling potential auto tariffs, the Europeans have begun drawing up a list of American products they would tax if the trade dispute escalates. |
| “We have already suffered from the tariffs on steel and aluminum, and we think that they are deeply unjustified,” Cecilia Malmstrom, the European Union trade commissioner, told reporters in Washington on Wednesday. Europe has already challenged the United States at the World Trade Organization over its imposition of 10 percent tariffs on aluminum and 25 percent on steel and has retaliated with tariffs on American goods like peanut butter, whiskey and orange juice. | “We have already suffered from the tariffs on steel and aluminum, and we think that they are deeply unjustified,” Cecilia Malmstrom, the European Union trade commissioner, told reporters in Washington on Wednesday. Europe has already challenged the United States at the World Trade Organization over its imposition of 10 percent tariffs on aluminum and 25 percent on steel and has retaliated with tariffs on American goods like peanut butter, whiskey and orange juice. |
| “We would do the same were we to be targets of tariffs on cars and car parts,” Ms. Malmstrom said. | “We would do the same were we to be targets of tariffs on cars and car parts,” Ms. Malmstrom said. |
| Ms. Malmstrom said that she had prepared a draft list of American sectors that could face retaliation but that they needed to be approved by member states of the European Union. While she would not detail the products, she said that Europe could retaliate against a range of American goods, including autos and agriculture, and that the response would be fully compatible with World Trade Organization rules. | Ms. Malmstrom said that she had prepared a draft list of American sectors that could face retaliation but that they needed to be approved by member states of the European Union. While she would not detail the products, she said that Europe could retaliate against a range of American goods, including autos and agriculture, and that the response would be fully compatible with World Trade Organization rules. |
| Still, she said, the aim is to resolve the trade differences before tensions escalate further. “We think there is much more to gain from having a positive agenda jointly,” Ms. Malmstrom said. | Still, she said, the aim is to resolve the trade differences before tensions escalate further. “We think there is much more to gain from having a positive agenda jointly,” Ms. Malmstrom said. |
| The remarks came after Ms. Malmstrom met with Robert E. Lighthizer, Mr. Trump’s top trade negotiator, to chart a path forward for negotiations. She described the discussions as productive, but expressed frustration about the lack of progress in getting the steel and aluminum tariffs lifted. | The remarks came after Ms. Malmstrom met with Robert E. Lighthizer, Mr. Trump’s top trade negotiator, to chart a path forward for negotiations. She described the discussions as productive, but expressed frustration about the lack of progress in getting the steel and aluminum tariffs lifted. |
| The steel tariffs and the fallout from Mr. Trump’s trade war with China have begun to have serious consequences for European growth. Germany’s official statistics office said Wednesday that the country’s economy shrank 0.2 percent in the third quarter of 2018 compared with the previous quarter, the first decline since 2015. One factor was a drop in German exports to China, where the economy has slowed in part because of American tariffs on Chinese goods. | The steel tariffs and the fallout from Mr. Trump’s trade war with China have begun to have serious consequences for European growth. Germany’s official statistics office said Wednesday that the country’s economy shrank 0.2 percent in the third quarter of 2018 compared with the previous quarter, the first decline since 2015. One factor was a drop in German exports to China, where the economy has slowed in part because of American tariffs on Chinese goods. |
| BMW, the German automaker, said last week that the trade war had so far cost the company nearly 300 million euros, or about $337 million, and that it might have to move some production from Spartanburg, S.C., to China to avoid retaliatory tariffs. | BMW, the German automaker, said last week that the trade war had so far cost the company nearly 300 million euros, or about $337 million, and that it might have to move some production from Spartanburg, S.C., to China to avoid retaliatory tariffs. |
| The United States and Europe called a trade cease-fire last summer after Mr. Trump and the president of the European Commission, Jean-Claude Juncker, agreed that there would be no additional tariffs imposed as they embarked on trans-Atlantic trade talks. | The United States and Europe called a trade cease-fire last summer after Mr. Trump and the president of the European Commission, Jean-Claude Juncker, agreed that there would be no additional tariffs imposed as they embarked on trans-Atlantic trade talks. |
| Ms. Malmstrom said that Europe was under the assumption that it would not face car tariffs while talks proceed but acknowledged on Wednesday that she had not received any assurances about such an exemption. | Ms. Malmstrom said that Europe was under the assumption that it would not face car tariffs while talks proceed but acknowledged on Wednesday that she had not received any assurances about such an exemption. |
| Congress must grant the Trump administration “fast track” authority to formally begin talks with Europe and the 28 European Union member states must also agree to a framework before talks can begin in earnest. That process could take a year. | Congress must grant the Trump administration “fast track” authority to formally begin talks with Europe and the 28 European Union member states must also agree to a framework before talks can begin in earnest. That process could take a year. |
| Wilbur Ross, the commerce secretary, warned on a trip to Europe last month that “the president’s patience is not unlimited” and lamented the lack of progress. However, on Wednesday, Ms. Malmstrom blamed the glacial pace of America’s legislative system for inhibiting negotiations. | |
| There is already disagreement on the scope of the talks and whether the negotiations will include agricultural products. The Trump administration has been pushing for greater access to Europe’s agricultural market — including selling more chicken, soy and dairy products. European officials say agricultural products are a no-go area, except for soybeans, while American officials want to break down barriers that make it difficult for farmers to sell beef and cheese in Europe. | There is already disagreement on the scope of the talks and whether the negotiations will include agricultural products. The Trump administration has been pushing for greater access to Europe’s agricultural market — including selling more chicken, soy and dairy products. European officials say agricultural products are a no-go area, except for soybeans, while American officials want to break down barriers that make it difficult for farmers to sell beef and cheese in Europe. |
| Expectations were low in Brussels on Wednesday that the talks in Washington would lead to a reduction in tensions that have begun to inflict tangible damage to the European economy. | Expectations were low in Brussels on Wednesday that the talks in Washington would lead to a reduction in tensions that have begun to inflict tangible damage to the European economy. |
| European leaders view Mr. Trump’s threat to impose tariffs on their auto exports as a nuclear option that would force them to break off talks and impose a new round of retaliatory measures. Shocked and surprised when Mr. Trump imposed tariffs this year on European steel and aluminum, they are still struggling to cope with his use of brinkmanship to negotiate with a longtime ally. | European leaders view Mr. Trump’s threat to impose tariffs on their auto exports as a nuclear option that would force them to break off talks and impose a new round of retaliatory measures. Shocked and surprised when Mr. Trump imposed tariffs this year on European steel and aluminum, they are still struggling to cope with his use of brinkmanship to negotiate with a longtime ally. |
| American officials, by contrast, believe that the steel tariffs successfully forced Europe to the bargaining table and Mr. Trump has repeatedly cited the threat of auto tariffs as the final nudge needed to get Mr. Juncker to agree to trade talks. | American officials, by contrast, believe that the steel tariffs successfully forced Europe to the bargaining table and Mr. Trump has repeatedly cited the threat of auto tariffs as the final nudge needed to get Mr. Juncker to agree to trade talks. |
| Mr. Trump convened his trade advisers at the White House on Tuesday to discuss a Commerce Department investigation into whether the auto tariffs pose a threat to national security — a precursor to imposing tariffs. For now, however, Mr. Trump has decided to hold off on moving ahead with them. | Mr. Trump convened his trade advisers at the White House on Tuesday to discuss a Commerce Department investigation into whether the auto tariffs pose a threat to national security — a precursor to imposing tariffs. For now, however, Mr. Trump has decided to hold off on moving ahead with them. |
| But the president has not been shy about making known his frustrations with Europe. In a Twitter post on Tuesday morning, Mr. Trump criticized France for making it hard for American winemakers to sell their products there and said, “Not fair, must change!” | But the president has not been shy about making known his frustrations with Europe. In a Twitter post on Tuesday morning, Mr. Trump criticized France for making it hard for American winemakers to sell their products there and said, “Not fair, must change!” |
| Such sentiments offer a taste of why a comprehensive trade agreement with Europe could be difficult. | Such sentiments offer a taste of why a comprehensive trade agreement with Europe could be difficult. |
| Armed with statistics on wine tariffs, Ms. Malmstrom noted that there was a minimal difference in the import taxes that the United States charged on foreign wine and what Europe charged. | Armed with statistics on wine tariffs, Ms. Malmstrom noted that there was a minimal difference in the import taxes that the United States charged on foreign wine and what Europe charged. |
| “In practical terms, it’s not really correct to say that,” Ms. Malmstrom said of Mr. Trump’s assertion. “We are happy to buy the American wine, and I think many Americans are happy to buy European wine as well. The costs are more or less the same when it comes to tariffs.” | “In practical terms, it’s not really correct to say that,” Ms. Malmstrom said of Mr. Trump’s assertion. “We are happy to buy the American wine, and I think many Americans are happy to buy European wine as well. The costs are more or less the same when it comes to tariffs.” |