The European Union will retaliate with extra duties on 35 billion euros worth of US goods, if Washington imposes tariffs of 25 per cent on cars manufactured in the EU, Trade Commissioner Cecilia Malmström told MEPs on Tuesday.
“It is already basically prepared, worth 35 billion euros. I do hope we do not have to use that one,” she said.
Transatlantic trade relations have been frosty since the US introduced tariffs on European steel and aluminum in May last year, which led to European punitive tariffs on selected US goods.
The European Commission and the White House subsequently agreed to work to reduce trade barriers between the blocs, but negotiations on an agreement have come to a standstill, since the US has made it clear that it also wants to include agricultural goods in the agreement, which the EU does not accept
The European Commission has decided that the EU will begin charging import duties of 25 per cent on EUR 2.8 billion of American goods, starting Friday. The tariffs will be placed on a range of goods, including jeans, bourbon and motorbikes.
EU Affairs and Trade Minister Ann Linde (S) tells the newspaper Svenska Dagbladet that EU governments have ensured that the range of goods on the list can be purchased from countries other than the US. The two products on the list where the value of Swedish direct imports from the US is highest are cosmetics and rear-view mirrors.
Meanwhile, Prime Minister Stefan Löfven said yesterday that the government is preparing for a scenario in which the US will impose tariffs on motor vehicles and that “we will not end up again in a situation like the one we had in 2008 and 2009”.
The PM who was visiting the site of Hybrit – an SSAB, LKAB and Vattenfall project to produce fossil-free steel – is concerned over the risk of a tariff spiral, which does not bode well for the Swedish economy.
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