EU's Malmstrom assumes U.S. won't slap autos tariffs during talks

WASHINGTON (Reuters) – The European Union’s trade commissioner, Cecilia Malmstrom, said on Tuesday she assumes the United States will not slap auto tariffs on the EU while the two sides are negotiating on trade, even as the Trump administration considers options to shield the U.S. auto industry from imports.

Malmstrom told an audience at the German Marshall Fund in Washington that any move by the United States to impose auto tariffs would not apply to the EU due to an agreement in July between President Donald Trump and European Commission President Jean-Claude Juncker.

“We assume that if that (U.S. auto tariffs) were to happen, that would not be for the European Union,” she said.

Senior Trump administration officials on Tuesday discussed the U.S. Commerce Department’s draft recommendations on its “Section 232” national security probe into the autos sector, which have been submitted to the White House and are being reviewed by various federal agencies.

Two administration officials said no decisions were made at the meeting on Tuesday and no announcement is planned. The contents of the recommendations have not been disclosed.

The advancement of Commerce’s autos report, which Trump has said could lead to tariffs on imported cars and parts of up to 25 percent, was seen as a way to ramp up pressure for better trade terms with the EU and Japan, one administration official told Reuters on Monday.

Malmstrom, who is meeting with U.S. Trade Representative Robert Lighthizer on Wednesday to pursue more regulatory cooperation and discuss what future trade negotiations might cover, said she would be willing to include autos, but made clear that any U.S.-EU trade deal would be limited in scope, covering industrial goods.

“It would be limited, and let me state and be very clear, it will not include agriculture,” she said.

Any deal on regulatory cooperation to facilitate more trade or on EU purchases of U.S. soybeans and liquefied natural gas would be done outside of the trade negotiations, as a voluntary arrangement, Malmstrom said. These areas were outlined during the Trump-Juncker meeting in July.

Malmstrom said she would need a mandate from EU governments to launch formal negotiations with the United States, and many EU members, notably France, are opposed to including agriculture in the talks. Lighthizer is now consulting with Congress on EU negotiations, which cannot begin until a 90-day “fast track” notification period expires in January.

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