Trump rejects EU offer on auto tariffs, threatens to pull US out from WTO

US President Donald J. Trump gestures during a meeting on a grant for support program for drug-free communities, in the Roosevelt Room of the White House in Washington, DC, USA, 29 August 2018. [EPA-EFE/MICHAEL REYNOLDS]

President Donald Trump on Thursday (30 August) rejected as “not good enough” a European Union proposal scrapping tariffs on automobiles, a move which threatens to amplify a simmering trans-Atlantic trade dispute.

Just hours earlier, the EU Trade Commissioner Cecilia Malmström had said the bloc was “willing to bring down… our car tariffs to zero” provided that the United States did the same.

“It’s not good enough,” Trump told Bloomberg News in an Oval Office interview, speaking of the Brussels offer.

“Their consumer habits are to buy their cars, not to buy our cars.”

EU willing to agree on zero car tariffs with Trump

Commissioner for Trade Cecilia Malmström confirmed on Thursday that the EU would be willing to reach a “reciprocal” agreement with the US to scrap car tariffs as part of a new deal, but she added that both sides still have “profound disagreements” on trade.

The White House in July sought to defuse the trade tiff when Trump and European Commission President Jean-Claude Juncker met and pledged to work towards a limited trade accord that would eliminate customs duties, but excluded the automobile sector.

Trump on Thursday also compared the EU to China. He has reportedly threatened to slap import taxes on $200 billion in Chinese goods, as a trade war escalates with Beijing.

“The European Union is almost as bad as China, just smaller,” Trump said.

Soybeans bring appeasement to EU-US trade war

The EU’s pledge to import more soybeans from US farmers was the ‘dealmaker’ in the agreement between European Commission President Jean-Claude Juncker and US President Donald Trump to stop the dispute and open trade talks, EU sources told EURACTIV.

“If they don’t shape up, I would withdraw from the WTO”

He also warned that he could pull the United States out of the World Trade Organisation.

“If they don’t shape up, I would withdraw from the WTO,” Trump said of one of the key anchors of the post-World War II multilateral trading system that the United States helped construct.

At a time when Trump’s protectionist policies have sparked a wave of trade wars, the institution best placed to help settle trade differences is facing a deepening crisis.

This week Washington blocked the reappointment of a WTO judge, increasing the risk it could soon find itself unable to fulfil its key role in arbitrating disputes.

Summit conclusions detail reform plan for WTO to please Trump

The EU leaders agreed “in substance” on Thursday (28 June) on a set of proposals to improve the World Trade Organisation, which should pave the way for finding common ground with US President Donald Trump and de-escalating the ongoing trade dispute. But Italy blocked their formal adoption until the migration issue was fully addressed.

Subscribe to our newsletters

Subscribe