US President Donald Trump and European Commission President Jean-Claude Juncker have reached something of a truce as the threat of a full-on trade war between the United States and European Union looms, promising to suspend new tariffs while trade negotiations continue, Bloomberg reports. Both parties have agreed to reduce industrial tariffs, save for those on automobiles, as well as to reexamine US import duties on European steel and aluminum, and tariffs levied by the EU in response.
That still leaves Ford Motor Company and its competitors in an uncertain position moving forward. The United States’ tariffs on imported steel and aluminum could leave those metals in short supply, the Alliance of Automobile Manufacturers argued in May, driving up costs for American auto manufacturing and resulting in higher prices for consumers. Moreover, Trump previously threatened to raise tariffs on imported European vehicles by 25 percent – a move that would add an estimated $11,700, on average, to the price of each European-built car sold in the US, according to a European Commission assessment.
That could help domestic manufacturers grow their market share in the US, but the EU would almost certainly retaliate in kind.
The Alliance of Automobile Manufacturers, of which Ford is a member, greeted the news of Trump’s progress with Juncker on matters of trade. In a statement, the lobbying group said that “today’s announcement demonstrates that bilateral negotiations are a more effective approach to resolving trade barriers, not increasing tariffs.”
The EU currently taxes automobiles imported from the US at a ten-percent rate, versus the 2.5-percent tariff European vehicles face from the US. Regardless of what happens with the European Union, the United States’ steep new tariffs on steel and aluminum imported from China are set to continue for now.