European Commission chief Jean-Claude Juncker warned today the EU would hit back with tariffs of its own if Donald Trump made good on threats to slap duties on foreign cars, as an EU-US trade truce wobbled.
"We agreed with Trump on a kind of ceasefire when it comes to new car tariffs," Juncker told German broadcaster ZDF.
"As is the case with ceasefires, sometimes they come under threat but they are still respected." But if the US president were to violate that agreement and impose tariffs on car imports from the European Union, Juncker said, "then we will do the same".
The comments came a day after Trump reportedly rejected an EU proposal to scrap tariffs on automobiles, reawakening a transatlantic trade spat.
EU Trade Commissioner Cecilia Malmstroem had said the bloc was "willing to bring down... our car tariffs to zero" provided that Washington did the same.
But in an interview with Bloomberg News yesterday, Trump said the proposal was "not good enough".
"Their consumer habits are to buy their cars, not to buy our cars." He also compared the EU to China, which is locked in a festering trade war with the US.
"The European Union is almost as bad as China, just smaller," Trump told Bloomberg.
Trump and Juncker met at the White House in July to defuse a brewing tit-for-tat trade confrontation sparked by US tariffs on EU metals imports.
The pair pledged to hold off from imposing new tariffs and to work towards a limited trade accord that would eliminate customs duties.
Trump has in the past threatened taxes of up to 25 per cent on EU cars. German car giants like Volkswagen and BMW would be among those hardest hit if the tariffs were imposed.
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