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The European Union is preparing to cut car import tariffs for the United States to prevent a trade war with Donald Trump, should he return to the White House.
Currently, the EU has imposed a 10% tariff on American cars, significantly higher than the US rate of 2.5% which is higher than the United States’ 2.5% tariff on the EU. Bernd Lange, the head of the European Parliamentary Trade Committee, stated that the bloc is open to altering this tariff as part of a trade negotiation with the US designed to mitigate trade conflicts.
This comes as part of the spending policy of the EU aimed at the constant criticism by Trump regarding the trade surplus the US has with the EU. The EU has pledged to not only lower tariffs but also increase the amount of liquefied natural gas and arms purchased from the United States.
Lange emphasized the importance of reaching a deal before escalating tariffs leading to higher costs for businesses and consumers. The approach is similar to past EU efforts to de-escalate trade disputes during Trump’s first term when Brussels reduced tariffs on lobsters and boosted imports of LNG and soybeans.
The European car industry supports the proposal, with top executives like BMW’s Oliver Zipse and Mercedes’ Ola Källenius advocating for reduced tariffs. The EU exported 738,436 vehicles worth £37.4 billion to the US in 2022, while it imported only 271,476 vehicles valued at £8.7 billion.
Under World Trade Organization (WTO) rules, any tariff reductions would apply to all WTO members, not just the US. However, Lange noted that lowering tariffs could demonstrate the EU’s commitment to fair trade relations.
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