A confidential US Commerce Department report sent to President Donald J. Trump over the weekend clears the way for him to evoke a “national security threat” under section 232 of a 1962 trade law, a provision that allows tariffs on items that threaten national security.
Under the law, the US may impose a 25% tariff for auto parts and cars, which would be a severe blow to European exporters, particularly Germany.
Upon receiving the report on February 17, Trump has 90 days to decide whether to impose import duties. In November 2018, the White House called for a 25% import duty on imported cars following mass layoffs at General Motors.
To avoid a trade war, Germany’s Economy Minister Peter Altmaier favoured a reduction of import tariffs for cars to “ideally zero per cent” both in the US and Europe, he told Deutschlandfunk radio on February 19.
Altmaier held consultations with his French counterpart Bruno Le Maire in Berlin where the two were expected to debate the scope of the mandate of the European Commission to negotiate with Washington over trade.
Reflecting Franco-German considerations, the European Parliament’s Trade Committee approved the European Commission’s mandate to begin limited EU-US trade talks by a vote of 21 to 17 and one abstentions. The mandate approved will include cars and car tariffs. However, the committee did set preconditions for the conclusion of a deal – chiefly, that the US must lift tariffs on aluminium and steel.