Trump revives trade battle with EU with threat to cars

Also takes aim at nations introducing digital services tax against US tech giants

DAVOS: US President Donald Trump, fresh from calling a trade truce with China, threatened on Wednesday to impose crippling tariffs on European autos unless the EU budges on a long-delayed deal.

Trump, attending the Davos conclave as his dramatic Senate impeachment trial unfolds back home, revived an offensive against the European Union a day after dismissing climate campaigners as “prophets of doom”.

Washington also took aim at European nations that are introducing a digital services tax against US technology giants such as Amazon, Facebook and Google, which stand accused of depriving governments of a fair share of their mammoth cross-border profits.

“The European Union is tougher to deal with than anybody. They’ve taken advantage of our country for many years,” Trump told Fox Business News on the sidelines of the World Economic Forum in the Swiss Alps.

“Ultimately, it will be very easy because if we can’t make a deal, we’ll have to put 25% tariffs on their cars,” he added.

There was no immediate response from Germany, Europe’s biggest auto exporter. The price of high-end marques such as BMW and Audi risks spiralling beyond consideration for many American drivers if Trump goes through with the threat.

But European Commission Chief Ursula von der Leyen emerged from a “very good conversation with” the president in Davos talking up the prospects of a deal covering trade, technology and energy.

“We are expecting in a few weeks to have an agreement that we can sign together,” she said. Trump said his attention was turning to Europe after he sealed a ceasefire on trade with China this month.

That cooled a destabilising tariffs war Trump ignited between the two biggest economies, after he took office vowing also to rewrite a North American accord and overhaul the World Trade Organization (WTO). The US and EU agreed to pursue a trade deal in July 2017 as a tentative truce after Trump had taken office and declared a war on America’s yawning trade deficits with the likes of China and Europe.

Europe’s auto industry has remained outside a tit-for-tat tariffs round so far. But US Treasury Secretary Steven Mnuchin warned that would change if Europeans go through with the digital tax.

Published in The Express Tribune, January 23^rd, 2020.

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