The European Union says it is already preparing action against the United States when President Donald Trump imposes duties on imported cars and car parts.
The auto industry is a big employer and exporter in Europe and the new tariffs This could hit the region as hard as US consumers and manufacturers, where prices would rise.
EU Trade Commissioner Cecilia Malmstrom said on Thursday that the 28-nation bloc would have to impose more "rebalancing measures" if Trump escalates trade tensions with auto tariffs. They would be in addition to tariffs imposed by the United States on steel and aluminum imports, whereupon the EU has imposed tariffs on US products.
"If the US introduced these car fares, that would be very unfortunate," said Malmström. She said that the EU "is also preparing a list of compensatory measures there, which we have made clear to our American partners."
Malmstrom and EU Commission President Jean-Claude Juncker will visit Trump more and more frequently next week at a time when relations are deteriorating. On a visit to Europe last week, Trump has repeatedly blamed the EU as an unfair trading partner, calling the bloc an "enemy."
The EU says it has higher fares for cars than the US ̵
The visit of EU officials on July 25 will try to contain the damage, and Malmstrom will try to ensure that the trade conflict does not spread to the lucrative automobile sector, too. Malmström admitted, however, that the US-EU meeting could be "a bit unpredictable".
Earlier this month, the EU released an analysis of the potential economic impact of US tariffs on the auto industry and estimated that it could lead the world economy. The EU and other US trading partners are paying customs duties on American goods worth 294 billion US dollars or about 19 percent of total US exports revenge.
She noted that EU car companies are big employers in the US and provide jobs for about half a million people through direct employment and dealerships. The tariffs, said the bloc, would put US GDP at $ 13-14 billion.
A lot is at stake for Europe, as companies like BMW, Daimler, Volkswagen and Fiat Chrysler send $ 46.6 billion worth of vehicles each year to the United States. Approximately 13.3 million people or 6.1 percent of the United States Working people in the EU work according to the Association of European Automobile Manufacturers in the Automotive Sector.