Despite truce, car exporters meet to discuss tariff threat
Countries reportedly set to plan coordinated response to possible US tariffs
Several days after a surprise announcement that the Trump administration agreed not to impose tariffs on auto imports – so long as trade negotiations with the European Union continue – it was reported that the world’s largest auto exporters are getting ready to sit down to discuss a response, should the US go ahead with the threat.
Officials from the EU, Canada, Mexico, South Korea and Japan will convene in Geneva on July 31 to debate coordinating efforts, Bloomberg reported over the weekend, citing three people familiar with the matter. The sources also said the discussions would include the topic of how to reform the World Trade Organization.
While two officials said the prospect of a plurilateral accord to cut auto tariffs would be explored, other officials stressed that was not on the formal agenda.
On Tuesday, after meeting with European Commission President Jean-Claude Juncker, US President Donald Trump announced in a joint statement that a “deal” had been reached to forestall the imposition of tariffs on cars.
The agreement in principle for the EU to explore increasing purchases of US agricultural products and liquefied natural gas in exchange for a ceasefire in the escalating tariff battle was a welcome surprise. But there was no indication the Trump administration was considering lifting tariffs on European steel and aluminum, or that the EU would drop retaliatory tariffs on US goods.
While this breakthrough was announced in a much more high-profile setting, a similar development was also announced during ongoing trade talks with China, only to be quickly reversed. US Treasury Secretary Steven Mnuchin previously said that the White House had reached an agreement with Beijing not to impose tariffs on Chinese goods, while talks for China to increase purchases of agricultural and energy products were ongoing. Nonetheless, the tariffs were imposed on schedule, amid reports that Trump was not satisfied with China’s concessions.
The prospect of an international trade agreement on cars, which may or may not be seriously considered during talks this week, has been dismissed by some as impractical, due to the domestic politics of lowering import barriers in some of the large auto export nations. In order to be compliant with WTO rules, such a plurilateral deal would theoretically have to include all major car exporters.