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EU prepared for retaliatory auto tariffs if U.S. trade talks fail

By Susan McFarland
The European Union's trade commissioner said Thursday she hopes a meeting with Trump administration officials next week will ease tensions and avert a tariff war for imported automobiles. File Photo by John Angelillo/UPI | <a href="/News_Photos/lp/04610d6a0f60acd80658fdc19ddfab47/" target="_blank">License Photo</a>
The European Union's trade commissioner said Thursday she hopes a meeting with Trump administration officials next week will ease tensions and avert a tariff war for imported automobiles. File Photo by John Angelillo/UPI | License Photo

July 19 (UPI) -- The European Union's trade commissioner said Thursday she hopes a meeting with the Trump administration this month will ease a trade dispute brewing over new tariffs on cars.

Talks are set between EU and U.S. officials July 25. If they fail, the European body will immediately hit the United States with tariffs on a new list of goods, EU trade chief Cecilia Malmstrom said.

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"If the U.S. would impose these car tariffs that would be very unfortunate, but we are preparing together with our member states a list of rebalancing measures as well," she said.

Hoping to ease trade tensions, European Commission President Jean-Claude Juncker will bring two negotiating proposals to the table -- reducing levies on cars and parts among all major auto-exporting countries in a plurilateral deal, and the possibility of a limited free-trade agreement.

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President Donald Trump invoked national security concerns in March when imposing tariffs on imported steel and aluminum.

Last month, the EU issued new tariffs on more than $3 billion worth of imports from the United States, a move that immediately was followed by a threat of a 20 percent tariff on all British-made vehicles exported to the United States.

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Wednesday, Malmstrom said she's taking steps to safeguard industries from the flood of steel moving into the market because of the U.S. tariffs.

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"The U.S. tariffs on steel products are causing trade diversion, which may result in serious harm to EU steelmakers and workers in this industry," she added. "We are left with no other choice than to introduce provisional safeguard measures to protect our domestic industry against a surge of imports."

Earlier this month, the EU published an analysis about the negative impact auto tariffs would have. Levies on vehicles would have a severe impact on European automakers like BMW, Volkswagen, Daimler and Volvo, all of which export heavily to the U.S. market.

Volvo recently opened a new car assembly plant in South Carolina, but the vehicles' engines are imported from Europe. BMW, which also has a plant in South Carolina, has said new tariffs would endanger jobs at the U.S. plant.

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