EU counterattack to hit US exports worth $294 bn

The European Union (EU) has warned the United States that imposing import tariffs on cars and car parts would harm its own automotive industry and likely lead to counter-measures by its trading partners on $294 billion of US exports.

In a 10—page submission to the US Commerce Department sent last on Friday, the EU said tariffs on cars and car parts were unjustifiable and did not make economic sense.The Commerce Department launched its investigation, on grounds of national security, on May 23 under instruction from President Donald Trump, who has repeatedly criticised the EU over its trade surplus with the US and for having higher import duties on cars. The EU has a 10 per cent levy, compared to 2.5 per cent for cars entering the US.

Trump said last week that the government was completing its study and suggested the US would take action soon, having earlier threatened to impose a 20 per cent tariff on all EU—assembled cars.The bloc exported 37.4 bn euros ($43.6 bn) of cars to the US in 2017, while 6.2 billion euros worth of cars went the other way.

The EU says that for some goods, such as trucks, US

import duties are higher.

In its submission, the EU said that EU companies make close to 2.9 mn cars in the US, supporting 120,000 jobs - or 420,000 if cars dealerships and car parts retailers are included. Imports had, it said, not shown a dramatic increase in recent years and largely grown alongside overall expansion of the US car market, with increased demand that could not be met by domestic production.