The European Union (EU) warned Washington imposing import tariffs on cars and car parts would be "counterproductive" and could affect up to 290 billion U.S. dollars of U.S. exports, according to an EU statement on Monday.
The EU said in its 11-page submission to the U.S. Commerce Department on Friday that the U.S. on-going Section 232 National Security Investigation of imports of automobiles "lacks legitimacy, factual basis and violates international trade rules".
The EU reiterates its "firm opposition" to the measures taken on supposed national security grounds "for the purposes of economic protection", saying it will harm trade, growth and jobs in the U.S. and abroad, weakens the bonds with friends and allies.
U.S. President Donald Trump announced on May 23 that he had instructed the Commerce Department to launch an investigation into automobile imports under Section 232 of 1962 Trade Expansion Act, which would allow Washington to introduce tariffs on national security ground.
Washington had cited a similar security provision when it proposed to introduce additional tariffs on steel and aluminum imports in March. As such, the investigation on car imports may lead to an increase in U.S. tariffs on foreign car, trucks, and vehicle parts up to 25 percent.
"Automobile imports from the EU do not threaten or impair the health of the US industry and economy. The EU and U.S. industry specialize in largely different market segments and over the last 5 years imports from the EU have been stable and correlated to U.S. general GDP growth," said the EU statement.
"EU car companies contribute significantly to US welfare and employment. They are well integrated in the US value chain and export about 60 percent of automobiles to third countries including the EU, contributing to improving the U.S. trade balance," it added.
The EU warned that the impact on the U.S. economy will be aggravated significantly by the likely countermeasures of U.S. Trading partners, and could affect U.S. exports estimated at 294 billion U.S. dollars which stood around 19 percent of U.S. total exports in 2017.
The EU has also requested to participate in the public hearing to be held by the Department of Commerce scheduled for July 19 and 20.
