Finance ministers of European countries have expressed have expressed their relief at the news that thee will be a likely delay to car tariffs by the President Donald Trump administration, as they believe that any new levies would weigh on global growth.
The White House has until the midnight of Friday (Washington Time) to decide whether it would impose tariffs on cars and car parts from Europe. However, a few sources have told news agencies that the US will delay the decision by six months.
“That’s a wise decision,” French Finance Minister Bruno Le Maire told news agencies on Thursday in Brussels. “I think we should avoid any kind of sanctions, tariffs and trade war because, you know, the deep conviction of the French government is entering any kind of trade war will have a very negative effect on global growth, growth for the U.S., growth for China, and of course for all European countries,” he added.
Since Germany is one of the largest direct car exporters to the US, the duties on European car imports could possibly hurt her the most.
This threat is a strong concern for European leaders at a time when the Euro zone is showing some sign of weakness. Manufacturing and growth data have made the European Central Bank cut its growth forecasts for the year. Growth in the region, particularly Germany would be receptive to external shocks based on its export-driven economy
Olaf Scholz, the German finance minister told news agencies on Thursday that, for a strong world economy it’s important that “we increase trade and not increase new barriers,”.
“It is a very good message,” he added, regarding the reports of the postponement.
Back in 2018, Trump said that it would impose 20% tariffs on European cars, stating that there is a trade imbalance that would adversely affect the US national security.
The EU has made every effort to ensure the tariffs are avoided ever since. Last year, European Commission President Jean-Claude Juncker traveled to the U.S. and agreed with Trump to work together to “bring existing tariffs toward zero on non-auto industrial goods; to buy more liquefied natural gas from the U.S. and to find ways to bring their standards closer together.”
However, there have been no negotiations that would lead to a potential trade deal yet. “Each day when we don’t have a trade war between Europe and the United States is a good day,”Kristian Jensen, the Danish finance minister remarked. “And the longer the postponement, the more we can work to get (the trade war) off the table,” he added.