The European Union has warned the United States that imposing import tariffs on cars and car parts would likely lead to counter-measures by its trading partners, Reuters reported.
The warning was included in the European Commission’s written response to the Donald Trump administration’s investigation into imports of cars and car parts. The 10-page submission was sent to the US Department of Commerce on Friday and published on Monday, according to CNN Money.
Trump has threatened to impose a 20% tariff on the import of cars assembled in the European Union if the bloc fails to withdraw its curbs on Washington. In May, his administration had initiated an inquiry to ascertain if the automobile imports were a national security threat.
The commission said global retaliation against US tariffs on auto imports would have a bigger impact on the US economy than those provoked by the Trump administration’s steel and aluminium tariffs. It estimated that $294 billion, or around 19% of total US exports last year, could be affected.
The EU in its submission said that European companies make close to 2.9 million cars in the US, supporting 120,000 jobs – or 420,000 if cars dealerships and car parts retailers are included, according to Reuters.
The European Commission said the US investigation into auto imports “lacks legitimacy, factual basis and violates international trade rules”, according to CNN Money.
On Sunday, Trump said the European Union was “as bad” as China when it came to the way European countries traded with the US. He dismissed suggestions that his attacks on the EU were counterproductive.
The Donald Trump-administration on May 31 imposed a 25% tax on steel and 10% on aluminium from its allies European Union, Canada and Mexico.