EU set to seek car tariff reduction agreement with US

Imports and Exports | | MIC Customs Solutions |

A deal that would see a cut to import tariffs may soon be coming into effect, if new reports are to be believed.

The European Union (EU) is considering coming to an agreement with the US that would result in a cut to the tariffs imposed on car exporters.


According to the Financial Times, a group of unnamed diplomats briefed on the matter said officials are looking into whether or not it would be feasible to negotiate a deal with big car exporters, including the US, South Korea and Japan.


The news comes as president of the European Commission Jean-Claude Juncker and President Trump prepare to meet in Washington later this month, with EU officials concerned about a trade war with the US.


Should such a deal come into effect, it would see participants reduce tariffs to pre-agreed levels for a particular group of products, known as a plurilateral agreement. This would mean countries could make deals on tariffs without including the entire World Trade Organization.


It is hoped this would pacify Mr Trump amid claims that the US carmaking industry is being unfairly treated, but at the same time reduce export costs for other countries.


Mr Trump has already threatened to impose 20 per cent duties on all car imports from the EU if barriers to US exports are not broken down soon, a move that sent shares for the bloc's carmakers lower.


Currently, tariffs of ten per cent apply in the EU on passenger cars, while the rate imposed by the US is only 2.5 per cent. However, this does not take into account the fact that rates for some products - including pick-up trucks - are higher.


A statement from the European Commission refused to acknowledge the claims from the Financial Times, simply saying that Mr Juncker "has not yet decided" what he and Mr Trump will discuss and intends to "develop his thinking and strategy in the coming weeks".