AIX-EN-PROVENCE: The French government insisted on Sunday that Washington should expect united retaliation from Europe to further tariff increases after Germany signaled it was prepared to negotiate.
With Germany’s powerful car industry facing the threat of higher U.S. duties, Chancellor Angela Merkel said last Thursday she would back a lowering of European Union levies on imports of U.S. cars.
“If tomorrow there is an increase in tariffs, like in the car industry, our reaction should be united and strong to show that Europe is a united and sovereign power,” French Finance Minister Bruno Le Maire said.
“The question is no longer whether or not there will be a trade war, the war has already started,” he added, speaking at an economic conference in Aix-en-Provence, southern France.
U.S. President Donald Trump hit the EU, Canada and Mexico with tariffs of 25 percent on steel and 10 percent on aluminum at the start of June, ending exemptions that had been in place since March.
He further escalated tensions last month with threats to impose a 20 percent import tariff on all EU-assembled vehicles, which could upend the industry’s current business model for selling cars in the United States.
“Let it be known that if we are attacked we will react collectively and we will react firmly,” Le Maire said.
The United States currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported U.S. cars.
Under World Trade Organization rules, the EU cannot lower import tariffs for only U.S.-made cars. It would have to reduce them for all WTO members.