The European Union sent a letter to the Trump administration Friday threatening nearly $300 billion in retaliatory auto tariffs should the Commerce Department move forward with tariffs on European cars and auto parts.
The letter, published Monday, indicated that the retaliatory tariffs would target $294 billion in U.S. goods, or roughly 19 percent of all U.S. exports — making them considerably more drastic than the E.U. tariffs imposed in response to American aluminum and steel tariffs levied in May.
“The European Union would therefore caution the United States against pursuing a process which could result in yet another disregard of international law, which would damage further the reputation of the United States and which the international community cannot and will not accept,” the European Commission wrote.
The Commission’s comments came in response to a U.S. government investigation into auto imports and whether they constitute a collective threat to national security, the justification the Commerce Department used for implementing previous tariffs absent congressional approval.
In the letter, the Commission argued that European auto imports do not pose a national-security risk to the U.S. and, as a result, the Trump administration would violate international trade law by taxing them.
The Trump administration’s investigation into taxing auto imports “lacks legitimacy, factual basis and violates international trade rules,” the Commission wrote.
Trump attacked the E.U. as “possibly as bad as China, only smaller,” during a Fox News appearance on Sunday. “They send a Mercedes in, we can’t send our cars in,” he added.
The U.S. currently imposes a 2.5 percent tariff on European-built cars and a 25 percent tariff on vans and pickup trucks, while the E.U. levies a 10 percent tariff on American-made cars.
In its strongest repudiation of Trump’s protectionist policies to date, the Commission wrote that the threat of steep tariffs “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.”