The European Union is warning the Trump administration that imposing new tariffs on automotive imports could cost the U.S. economy as much as $14 billion.
In response to a comment request from the U.S., the EU told the Commerce Department’s national security division in a letter sent on Friday that a 25 percent import on car and automotive parts “would in first instance have a negative impact on US GDP in the order of 13-14 billion USD, and the current account balance of the US would be not affected positively,” Politico reports.
The EU said that European car manufacturers accounted for 26 percent of U.S. automotive production in 2017 and noted that many foreign companies export production to the U.S.
“Around 60 percent of automobiles produced in the US by companies with exclusive EU ownership are exported to third countries, including the EU. Measures harming these companies would be self-defeating and would weaken the US economy,” the bloc wrote.
The EU warned that countries could retaliate against the U.S. should it move forward with its new automotive tariffs. The EU, Canada, and Mexico have all imposed retaliatory tariffs in response to the Trump administration’s duties on steel and aluminum imports.
General Motors warned on Friday that new tariffs could force them to layoff employees.
