TRADE: EU comments on the US car imports investigation

The European Union submitted its formal comments to the United States Department of Commerce in the framework of an on-going investigation on the impact of automotive imports on the US national security.

In the EU’s view, this current investigation lacks legitimacy, factual basis and violates international trade rules, just as the similar investigation that led to the imposition of steel and aluminium tariffs earlier this year. In its submission, now available online, the EU reiterates its firm opposition to the proliferation of measures taken on supposed national security grounds for the purposes of economic protection. This development harms trade, growth and jobs in the US and abroad, weakens the bonds with friends and allies, and shifts the attention away from the shared strategic challenges that genuinely threaten the market-based Western economic model. The EU and the US industry specialise in largely different market segments and over the last 5 years imports from the EU have been stable. While there is no economic threat to the US automobile industry which is healthy, imposing restrictive measures would in fact undermine the current positive trends of the US automobile sector. EU car companies operate in the US, they export about 60% of their US production to other countries, improving the US trade balance and providing 120,000 direct and 420,000 indirect jobs. Trade restrictions are likely to lead to higher input costs for US based producers, thus in effect becoming a tax on American consumers. The impact of potential new US tariffs on imported cars would be aggravated significantly by the likely countermeasures of US trading partners, as evidenced by the reaction to the US section 232 tariffs on steel and aluminium. The EU has also requested to participate in the public hearing to be held by the Department of Commerce scheduled for 19 and 20 July.